WGALLC 10.375 08/15/2025

Western Global Airlines

Credit, Industrial/Transportation


Publicly traded companies mentioned herein: Air Transport Services Group Inc (ATSG), Atlas Air Worldwide Holdings Inc (AAWW)

Highlights

The presenter is long the 10.375% August 2025 bonds of Western Global Airlines (WGA), one of the largest cargo airlines. This bond was issued in August 2020 to fund an ESOP purchase totaling ~40% of the equity from Founder Jim Neff and early shareholders. After the deal closed, the bond traded well with the yield as tight as mid-6% and the price reaching 114 in mid-2021. Since then, the business has been negatively impacted by more capex maintenance than expected and a diminished pilot fleet, which has disrupted efficiencies and its DoD business and has caused the bond to trade down to its current ~78 price (21.5% yield). As these headwinds dissipate, he thinks the bond can trade up to the mid-80 or low-90 range over the next year, implying a 20%+ total return with limited downside risk to fundamentals.

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Request access to DeMatteo Research for full access

Request Access

Already have an account?

Idea Discussion

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Idea Discussions display submitted commentary from our investor community.

To read and participate in the discussion with the presenter and investor base, request access to DeMatteo

Request Access

Already have an account?

An error occurred loading this content. Try again later or contact us.