MGM – CDS 195bps, Base Case iCDS 92bps, Negative Case iCDS 165bps, 2026 4.625% Bond YTW of 3.667%, Intrinsic YTW 1.557%, Ba3 Rating from Moody’s, HY1 (equivalent to Ba3) rating from Valens, High Refinancing Need

• Cash bond markets are materially overstating credit risk, with a YTW of 3.667%, relative to an Intrinsic YTW of 1.557%, and CDS markets are overstating credit risk, with a CDS of 195bps, relative to an Intrinsic CDS of 92bps
  
• Incentives Dictate Behavior™ analysis highlights mixed signals for debt holders. MGM’s compensation framework should focus management on top-line growth and margins, which should drive Uniform ROA expansion. Additionally, management members have low change-in-control compensation, indicating that they may not be incentivized to pursue a sale or accept a takeover of the firm, limiting event risk. Furthermore, management members are material owners of MGM equity relative to their annual compensation, indicating they may be well-aligned with shareholders for long-term value creation.
  
• Earnings Call Forensics™ of the firm’s Q3 2020 earnings call (10/29) highlights that management is confident their confirmed contracts have increased by over a hundred percent