TDG – Base Case iCDS 134bps, Negative Case iCDS 158bps, 2029 4.875% Bond YTW of 6.901%, iYTW of 6.001%, B1 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens, High Refinancing Need

April 26, 2024

  • Credit markets are overstating credit risk, with a cash bond YTW of 6.901% relative to an Intrinsic YTW of 6.001% and an Intrinsic CDS of 134bps. Furthermore, Moody’s is materially overstating TDG’s fundamental credit risk with its highly speculative B1 credit rating five notches below Valens’ IG4 (Baa2) credit rating.
  • Incentives Dictate Behavior™ analysis highlights mostly negative signals for creditors. That said, most management members have low change-in-control compensation relative to their annual average compensation, limiting event risk for creditors.

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