UAA – Base Case CDS 269bps, Base Case iCDS 168bps, Negative Case iCDS 224bps, 2030 7.250% Bond YTW of 6.947%, iYTW of 5.611%, Ba3 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need
July 17, 2025
- Credit markets are overstating UAA’s credit risk with a YTW of 6.947% relative to an Intrinsic YTW of 5.611% and a CDS of 269bps relative to an Intrinsic CDS of 168bps. Furthermore, Moody’s is materially overstating UAA’s fundamental credit risk with its Ba3 credit rating five notches below Valens’ IG4+ (Baa1) credit rating
- Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. 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, thereby reducing event risk for creditors.
- Earnings Call Forensics™ of the firm’s Q4 2025 earnings call (05/13/2025) highlights that management is confident partnerships with NFL starts will enhance their status in American football and that their category-led model combined with strong go-to-market discipline will boost demand from existing and new customers. Moreover, they are confident the story of products on their site differentiates them form competitors, their sales and margins benefited from favorable currency impacts, and they expect a gross margin expansion of 40 to 60 bps compared to last year.