UBER – CDS 83bps, Base Case iCDS 36bps, Negative Case iCDS 44bps, 2029 4.500% Bond YTW of 5.811%, iYTW of 4.881%, Ba3 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens, Low Refinancing Need

June 4, 2024

  • Cash bond markets are overstating credit risk with a YTW of 5.811% relative to an Intrinsic YTW of 4.881%, while CDS markets are slightly overstating risk with a CDS of 83bps relative to an Intrinsic CDS of 36bps. In addition, Moody’s is overstating UBER’s fundamental credit risk with its Ba3 credit rating four notches below Valens’ IG4 (Baa2) credit rating.
  • Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. As a positive, most members of management are material owners of UBER’s equity relative to their annual compensation, indicating they are aligned with shareholders to pursue long-term value creation for the company.
  • Earnings Call Forensics™ of the firm’s Q1 2024 earnings call (05/28/2024) highlights that management is confident they are introducing cash-back accelerators which should help penetrate more deeply into Mobility and that they are continuing to optimize the use of Uber Cash in the Mobility side.

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