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DISH – CDS 431bps, Base Case iCDS 128bps, Negative Case iCDS 189bps, 2024 5.875% Bond YTW of 6.627%, iYTW of 2.987%, Ba3 Rating from Moody’s, XO (equivalent to Baa3) Rating from Valens, High Refinancing Need

September 20, 2019

  • Credit markets are grossly overstating credit risk, with a CDS of 431bps and a bond YTW of 6.627% relative to an Intrinsic CDS of 128bps and an Intrinsic YTW of 2.987%. Furthermore, Moody’s is overstating DISH’s fundamental credit risk, with its Ba3 rating three notches lower than Valens’ XO (Baa3) rating
  • Incentives Dictate Behavior™ analysis highlights positive signals for credit holders. DISH’s compensation framework should drive management to improve all three value drivers, which should lead to Uniform ROA expansion, and greater cash flows available for servicing obligations. Furthermore, management members have no change-in-control compensation, indicating that they are not well-incentivized to accept a buyout or pursue a sale of the company, reducing event risk

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