Our client Vicki Bryan quoted in this article:
- “Most of the largest players, Delta included, have fundamentally changed their businesses sufficiently to generate record profits for years now, with strongly improved operating and financial metrics that surpass those of leading issuers in most other industry sectors in the high-yield market,” says Vicki Bryan of independent bond research shop Gimme Credit.
Yet investors’ lingering doubts mean that Delta’s debt “continues to be undervalued” compared with sectors with weaker credit quality metrics, such as home building and health care—even debt secured by its aircraft isn’t as well regarded as unsecured debt issued by some players in these fields. Bryan says she wouldn’t be surprised if ratings agencies upgrade Delta’s debt to investment-grade status, a move she sees as long overdue and one that would be a big catalyst for the stock.