PDCE – No Traded CDS, Base Case iCDS 100bps, Negative Case iCDS 338bps, 2026 5.750% Bond YTW of 4.854%, iYTW of 2.174%, Ba2 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens, Low Refinancing Need

December 27, 2021

  • Credit markets are grossly overstating PDCE’s credit risk, with a cash bond YTW of 4.854%, relative to an Intrinsic YTW of 2.174% and an Intrinsic CDS of 100bps. Meanwhile, Moody’s is overstating the firm’s fundamental credit risk, with its Ba2 credit rating three notches lower than Valens’ IG4 (Baa2) credit rating.
  • Incentives Dictate Behavior™ analysis highlights mostly positive signals for credit holders. PDCE’s compensation metrics incentivize management to improve all three value drivers: sales, margins, and asset utilization, which should drive Uniform ROA improvement and lead to increased cash flows available for servicing obligations going forward. Moreover, most management members are not well-compensated in a change in control, indicating they are not incentivized to pursue a sale or accept a buyout of the firm, reducing event risk. Finally, most members of management are material holders of PDCE equity relative to their annual compensation, indicating they may be well-aligned with shareholders for long-term value creation.
  • Earnings Call Forensics™ of the firm’s Q3 2021 earnings call (11/4) highlights that management is highly confident they have ample liquidity of about $1.7 billion.

You don’t have access to the Valens Research Premium Application.

To get access to our best content including the highly regarded Conviction Long List and Market Phase Cycle macro newsletter, please contact our Client Relations Team at 630-841-0683 or email

Please fill out the fields below so that our client relations team can contact you

Or contact our Client Relationship Team at 630-841-0683