Yields don‘t provide much support; maintain Underweight

研报英文原文证据摘录

Yields don‘t provide much support; maintain Underweight

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Somnigroup International Inc.

Yields don’t provide much support;

maintain Underweight

Credit Analysis

Maintain Underweight 21 July 2026

We maintain our Underweight on the SGI’s Sr Notes and Term Loan-B as we expect High Yield Credit

industry softness persists given continued pressure on housing affordability and choppy United States

market conditions. In addition, the company has indicated a willingness to complete Consumer Products

additional acquisitions and continues to pursue the acquisition of Leggett & Platt. The

4s trade at a yield-to-worst (YTW) of 5.4% and the 3.875s trade at a YTW of 5.7%, which

William M. Reuter

are inside of the BB Index (6.1%). The Term Loan-B trades at a yield of 5.7% vs the BB Research Analyst

Loan index at 6.5%. Despite the company continuously outperforming the industry, we BofAS+1 646 855 6363

do not believe investors are being adequately compensated in the bonds or loans and william.m.reuter@bofa.com

maintain our Underweights. Michael DeRienzo

Research Analyst

1Q Adj EBITDA grew due to full quarter of MF BofAS+1 646 855 7973

michael.derienzo@bofa.com

1Q26 Adj EBITDA increased 20% to $297 million largely due to the inclusion of Mattress

Firm. Net sales increased 12% to $1.80 billion. Tempur Sealy North America comparable

sales +MSD%. Tempur Sealy International sales (ex-forex) +7%. Mattress Firm Somnigroup International Inc.

(SGI)comparable sales were flat. Adj gross margins increased 140 bps to 43.6%. Based upon Key Data 1Q2025A 1Q2026A LTM

debt of $4.58 billion and cash of $111 million, net leverage was 3.3x at the end of the

Operating (US$ mm)

quarter. Revenues 1,605 1,802 7,673

FY26 Adj EBITDA guidance affirmed AdjCashEBITDAfrom ops 248106 297247 1,355940