ZIP – Base Case iCDS 322bps, Negative Case iCDS 369bps, 2030 5.000% Bond YTW of 7.172%, iYTW of 6.634%, B1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens, Low Refinancing Need
September 20, 2024
- Credit markets are slightly overstating ZIP’s credit risk with a YTW of 7.172% relative to an Intrinsic YTW of 6.634% and an Intrinsic CDS of 322bps. Furthermore, Moody’s is materially overstating ZIP’s fundamental credit risk with its B1 credit rating six notches below Valens’ IG4+ (Baa1) credit rating.
- Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. As a positive, management has low change-in-control compensation relative to their annual compensation, indicating they may not be incentivized to pursue a takeover or accept a sale of the company, decreasing event risk for creditors.
