TRIP – No Traded CDS, Base Case iCDS 134bps, Negative Case iCDS 188bps, 2025 7.000% Bond YTW of 8.066%, iYTW of 4.696%, B1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need
June 27, 2022
- Credit markets are grossly overstating credit risk with a YTW of 8.066% relative to an Intrinsic YTW of 4.696% and an Intrinsic CDS of 134bps. In addition, Moody’s is materially overstating TRIP’s fundamental credit risk with its speculative B1 credit rating six notches below Valens’ IG4+ (Baa1) credit rating.
- Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. Their compensation framework should drive them to focus heavily on top-line growth, while also improving company turns through software and software-as-a-service subscriptions. Meanwhile, CEO Kaufer’s material ownership of TRIP equity indicates he could convince other NEOs to align with the interests of shareholders.
