SWKS – Base Case iCDS 74bps, Negative Case iCDS 103bps, 2031 3.000% Bond YTW of 6.455%, iYTW of 4.891%, Ba1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need
April 21, 2025
- Credit markets are materially overstating SWKS’s credit risk with a YTW of 6.455% relative to an Intrinsic YTW of 4.891% and an Intrinsic CDS of 74bps. Furthermore, Moody’s is overstating the company’s fundamental credit risk, with its Ba1 credit rating three notches lower than Valens’ IG4+ (Baa1) credit rating.
- Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. That said, as a positive, all members of management have low change-in-control compensation relative to their average annual compensation, indicating they are not likely incentivized to pursue a takeover or accept a sale of the company, decreasing event risk for creditors.
