MOH – Traded CDS 279bps, Base Case iCDS 100bps, Negative Case iCDS 168bps, 2028 4.375% Bond YTW of 6.241%, iYTW of 3.941%, Ba3 Rating from Moody’s, IG3+ (equivalent to A1) Rating from Valens, Low Refinancing Need
- Credit markets are materially overstating credit risk, with a cash bond YTW of 6.241% and a CDS of 279bps relative to an Intrinsic YTW of 3.941% and an Intrinsic CDS of 100bps. 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.