TDG – No CDS, Base Case iCDS 157bps, Negative Case iCDS 186bps, 2027 7.500% Bond YTW of 7.536%, iYTW of 6.396%, B1 Rating from Moody’s, XO (equivalent to Baa3) Rating from Valens, High Refinancing Need

November 10, 2023

  • Credit markets are overstating credit risk, with a YTW of 7.536% relative to an Intrinsic YTW of 6.396% and an Intrinsic CDS of 157bps. Furthermore, Moody’s is overstating TDG’s fundamental credit risk with its B1 credit rating four notches below Valens’ XO (Baa3) credit rating.
  • Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. However, most management members have low change-in-control compensation relative to their annual average compensation, indicating they are less likely to pursue a takeover or sale of the company, reducing event risk for creditors.

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