MU – Base Case CDS 57bps, Base Case iCDS 23bps, Negative Case iCDS 30bps, 2029 6.750% Bond YTW of 4.701%, iYTW of 4.201%, Baa3 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need
August 5, 2025
- Cash bond markets are slightly overstating credit risk with a YTW of 4.701% relative to an Intrinsic YTW of 4.201%. Meanwhile, Moody’s is overstating MU’s fundamental credit risk with its Baa3 credit rating, two notches below Valens’ IG4+ (Baa1) credit rating.
- Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. As a positive, management members are material owners of MU equity relative to their annual compensation, indicating they may be aligned with shareholders to pursue long-term value creation for the company.
- Earnings Call Forensics™ of the firm’s Q3 2025 (07/25/2025) earnings call highlights that management is confident their storage business unit revenue and mobile business unit revenue grew 4% and 45% sequentially, respectively. In addition, they are confident their inventory level supports strong sales.