MOH – Base Case CDS 112bps, Base Case iCDS 81bps, Negative Case iCDS 152bps, 2028 4.375% Bond YTW of 6.140%, iYTW of 5.170%, Ba2 Rating from Moody’s, IG3+ (equivalent to A1) Rating from Valens, Low Refinancing Need

May 22, 2024

  • Cash bond markets are overstating MOH’s credit risk with a YTW of 6.140% relative to an Intrinsic YTW of 5.170%, while CDS markets are accurately stating credit risk with a CDS of 112bps relative to an Intrinsic CDS of 81bps. Furthermore, Moody’s is materially overstating MOH’s fundamental credit risk with its highly speculative Ba2 credit rating seven notches below Valens’ IG3+ (A1) credit rating.
  • Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. As a positive, most management members are material owners of MOH equity relative to their average annual compensation, indicating they are well-aligned with shareholders to pursue long-term value creation for the company.

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