MOH – CDS 165bps, Base Case iCDS 94bps, Negative Case iCDS 148bps, 2028 4.375% Bond YTW of 4.631%, iYTW of 3.281%, Ba3 Rating from Moody’s, IG3+ (equivalent to A1) Rating from Valens, Low Refinancing Need
- Cash bond markets are overstating credit risk, with a cash bond YTW of 4.631% relative to an Intrinsic YTW of 3.281%, while CDS markets are slightly overstating credit risk, with a CDS of 165bps relative to an Intrinsic CDS of 94bps. Meanwhile, Moody’s is grossly overstating the firm’s fundamental credit risk, with its Ba3 credit rating eight notches lower than Valens’ IG3+ (A1) credit rating.
- Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. That said, management members are material owners of MOH equity relative to their average annual compensation, indicating they are well-aligned with shareholders for long-term value creation.