SWKS – Base Case iCDS 75bps, Negative Case iCDS 104bps, 2031 3.000% Bond YTW of 5.385%, iYTW of 4.734%, Ba1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need
July 17, 2025
- Credit markets are slightly overstating SWKS’s credit risk with a YTW of 5.385% relative to an Intrinsic YTW of 4.734% and an Intrinsic CDS of 75bps. 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.
- Earnings Call Forensics™ of the firm’s Q2 2025 earnings call (05/07/2025) highlights that management is confident they will focus on accelerating the growth in their diversified businesses.