Credit Calls

Research evidence excerpt

J P M O R G A N

North America Credit Research

10 August 2026

Credit Calls

Monday, August 10, 2026

Feature

Emergent BioSolutions: It’s been a great ride; However, Q2 weak, guidance

weaker and year basically over - focused on capital structure options but in the

meantime moving to UW from OW (Rishi S Parekh)

Recommendation: It’s been a great ride with bonds tightening materially over the

last few years, but we believe it’s time to move forward now that the year is

basically over (given their guidance). We are moving the notes from OW to UW.

The remainder of the year seems challenging, Narcan trends (while not too

surprising) may be a bigger problem and the lumpiness is manageable at 15%

(YTW) but not at 8.5-9%, in our view. We realize there may be accelerated

surprises or opportunities to take advantage of the company’s open market

purchases or tenders and the bonds mature in 2 years, but that is a different analysis

and we would rather hold out for a lower entry point. We understand the baseline

EBITDA views (basically a base revenue/margin assumption – it’s how we model

the credit given the unknowns) but the primary credit attachment point (Narcan)

continues to decline. EBS operates in an important area and there could (and

should) be long-term opportunities to expand more aggressively into new markets,

but this is an opportunity that has been around for some time. The low coupon is

an asset, but it’s a short-term maturity which could present a problem. We do

believe the company needs to consider more creative refinancings to account for

the lack of visibility and uncertainties that continue to hamper the credit. The cut

in guidance is so low that the company could beat on further accelerated sales, but

we think we can read through that strategy. Risks include an immediate refi, strong

international wins, strategic initiatives, material FCF generation and accretive

M&A opportunities.

Built Different: 2Q26 Hyperscaler Earnings & FY26 Supply Upgrade (Erica

R Spear)

Hyperscaler spreads have weakened materially this summer, but we continue

to view the move as overwhelmingly technical rather than fundamental.

…