UBER – No Traded CDS, Base Case iCDS 41bps, Negative Case iCDS 54bps, 2026 8.000% Bond YTW of 4.234%, iYTW of 1.184%, B2 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need

August 27, 2021

  • Credit markets are grossly overstating credit risk with a cash bond YTW of 4.234% relative to an Intrinsic YTW of 1.184% and an Intrinsic CDS of 41bps. Moody’s is also materially overstating UBER’s fundamental credit risk with its highly speculative B2 credit rating seven notches below Valens’ IG4+ (Baa1) credit rating
  • Incentives Dictate Behavior™ analysis highlights mixed signals for credit holders. UBER’s compensation framework should drive them to focus on margin expansion and revenue growth, which may lead to Uniform ROA expansion. Moreover, management members have low change-in-control compensation indicating they are not incentivized to pursue a buyout and are material owners of UBER stock relative to their compensation, indicating they may be well-aligned with shareholders for long-term value creation