FANG – Base Case iCDS 149bps, Negative Case iCDS 232bps, 2025 5.625% Bond YTW of 3.722%, iYTW of 1.742%, Ba1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need

• Cash bond markets are materially overstating credit risk with a YTW of 3.722% relative to an Intrinsic YTW of 1.742% and an Intrinsic CDS of 100bps. Meanwhile, Moody’s is overstating FANG’s fundamental credit risk with its Ba1 credit rating three notches below Valens’ IG4+ (Baa1) credit rating
  
  
• Incentives Dictate Behavior™ analysis highlights positive signals for credit holders as FANG’s management compensation is focused on improving margins and asset utilization over time. This indicates that management is likely to drive higher cash flows to service obligations, which is a favorable indicator for debt holders. Furthermore, majority of management are material owners of FANG equity relative to their annual compensation, while all management members have low change-in-control compensation relative to their average annual compensation