MTCH – Base Case CDS 218bps, Base Case iCDS 199bps, Negative Case iCDS 311bps, 2027 5.000% Bond YTW of 7.096%, iYTW of 5.936%, Ba2 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens, Low Refinancing Need

March 23, 2023

  • Credit markets are overstating MTCH’s credit risk with a YTW of 7.096% relative to an Intrinsic YTW of 5.936%, while CDS markets are accurately stating MTCH’s credit risk with a CDS of 218bps relative to an Intrinsic CDS of 199bps. Furthermore, Moody’s is overstating MTCH’s fundamental credit risk with its speculative Ba2 credit rating three notches below Valens’ IG4 (Baa2) credit rating.
  • Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. As a positive, management’s compensation framework should generally drive management to focus on all three value drivers: margins, turns, and growth, which could lead to Uniform ROA expansion and increased cash flows available for obligations.
  • Earnings Call Forensics™ of MTCH’s Q4 2022 (02/01/2023) earnings call highlights that management is confident they are seeing good stability of peak season trends across all their businesses.

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