MSCI – Base Case iCDS 88bps, Negative Case iCDS 143bps, 2029 4.000% Bond YTW of 6.066%, iYTW of 5.236%, Ba1 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens, Low Refinancing Need

September 12, 2023

  • Credit markets are overstating MSCI’s credit risk with a YTW of 6.066% relative to an Intrinsic YTW of 5.236% and an Intrinsic CDS of 88bps. Meanwhile, Moody’s is overstating the firm’s fundamental credit risk, with its speculative Ba1 credit rating two notches below Valens’ IG4 (Baa2) credit rating.

  • Incentives Dictate Behavior™ analysis highlights mostly positive signals for credit holders. MSCI’s compensation metrics incentivizes management to improve all three value drivers: margins, revenue, and asset utilization. Moreover, all members of management are material owners of MSCI equity relative to their average compensation, indicating they may be aligned with shareholders to pursue long-term value creation for the company.

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