WMS – Base Case iCDS 107bps, Negative Case iCDS 128bps, 2030 6.375% Bond YTW of 5.840%, iYTW of 5.045%, Ba1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need
May 23, 2025
- Credit markets are overstating WMS’s credit risk with a YTW of 5.840% relative to an Intrinsic YTW of 5.045%, and an Intrinsic CDS of 107bps. Furthermore, Moody’s is overstating the firm’s fundamental credit risk, with its Ba1 credit rating three notches lower than Valens’ IG4+ (Baa1) credit rating.
- Incentives Dictate Behavior™ analysis highlights positive signals for credit holders. WMS’s metrics should generally drive all three value drivers which could lead to Uniform ROA expansion and increased cash flows available for obligations going forward. Additionally, all management members are material owners of WMS equity relative to their average compensation, indicating they may be aligned with shareholders to pursue long-term value creation for the company. Moreover, all management members have low change-in-control compensation relative to their annual compensation. This indicates they may not be incentivized to pursue a takeover or accept a sale of the company, reducing event risk for creditors.
- Earnings Call Forensics™ of the firm’s Q4 2025 earnings call (05/15/2025) highlights that management is confident they are providing services without any degradation in delivery performance and asset utilization.
