ROST – Base Case iCDS 42bps, Negative Case iCDS 48bps, 2031 1.875% Bond YTW of 5.116%, iYTW of 4.758%, A2 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need
February 10, 2025
- Credit markets are accurately stating ROST’s credit risk with a YTW of 5.116% relative to an Intrinsic YTW of 4.758% and an Intrinsic CDS of 42bps. That said, Moody’s is understating the company’s fundamental credit risk, with its investment-grade A2 credit rating two notches higher than Valens’ IG4+ (Baa1) credit rating.
- Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. As a positive, most management members are material owners of ROST equity relative to their annual compensation, indicating they may be well-aligned with shareholders to pursue long-term value creation for the company.
