REGI – No Traded CDS, Base Case iCDS 167bps, Negative Case iCDS 238bps, 2028 5.875% Bond YTW of 4.894%, iYTW of 22.914%, B1 Rating from Moody’s, IG3+ (equivalent to A1) Rating from Valens, Low Refinancing Need

• Credit markets are grossly overstating REGI’s credit risk with a YTW of 4.894%, relative to an Intrinsic YTW of 2.914% and an Intrinsic CDS of 167bps. Meanwhile, Moody’s is also grossly overstating the firm’s fundamental credit risk, with its highly speculative B1 credit rating nine notches lower than Valens’ IG3+ (A1) credit rating
• Incentives Dictate Behavior™ analysis highlights mixed signals for creditors. Members of management are material holders of REGI equity relative to their annual compensation, indicating they may be well-aligned with shareholders for long-term value creation. Furthermore, management has low change-in-control compensation relative to their average annual compensation, indicating they may not be incentivized to accept a takeover or pursue a sale of the company, reducing event risk
• Earnings Call Forensics™ of the firm’s Q1 2021 earnings call (5/3) highlights that management is confident they captured the cost benefits of feedstock in Q1 production better than the market and that they expect a risk management gain of $14 million. Moreover, they are confident RINs are working as designed to incentive production to meet renewable volume obligations and that CoverCress has large growth potential