SYNA – Base Case iCDS 153bps, Negative Case iCDS 251bps, 2029 4.000% Bond YTW of 6.853%, iYTW of 5.463%, Ba2 Rating from Moody’s, IG4+ (equivalent to Baa2) Rating from Valens, Low Refinancing Need
March 10, 2023
- Credit markets are overstating SYNA’s credit risk with a YTW of 6.853% relative to an Intrinsic YTW of 5.463% and an Intrinsic CDS of 153bps. Furthermore, Moody’s is overstating SYNA’s fundamental credit risk with its speculative Ba2 credit rating three notches below Valens’ IG4+ (Baa2) credit rating.
- Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. That said, as a positive, although most management members are not material owners of SYNA equity relative to their annual compensation, CEO Hurlston’s significant equity ownership indicates he may be able to convince other NEOs to align with shareholders to pursue long-term value creation.
- Earnings Call Forensics™ of SYNA’s Q4 2022 (02/23/2022) call highlights that management generated an excitement marker when discussing the growth opportunities in the automotive market. Moreover, they are confident they are expanding their total available market and that IoT Processor sell through is highly dependent on their inventory levels.