FINANCIAL INSTITUTIONSISSUER COMMENT 18 March 2016RATINGSBNP PARIBAS (BHP) Moodys SR Unsecured Rating A1Moodys Outlook STABond-Implied Rating Aa2CDS-Implied Rating Baa1EDF-Implied Rating Ba2As of March 16, 2016ContactsAllerton G. Smith 212-553-4058 Sr Dir-Sr Research Analyst allerton.smith@moodys.comABOUT CAPITAL MARKETS RESEARCHAnalyses from Moodys Capital Markets Research, Inc. (CMR) focus on explaining signals from the credit and equity markets. The publications address whether market signals, in the opinion of the groups analysts, accurately reflect the risks and investment opportunities associated with issuers and sectors. CMR research thus complements the fundamentally-oriented research offered by Moodys Investors Service (MIS), the rating agency.CMR is part of Moodys Analytics, which is one of the two operating businesses of Moodys Corporation. Moodys Analytics (including CMR) is legally and organizationally separated from Moodys Investors Service and operates on an arms length basis from the ratings business. CMR does not provide investment advisory services or products.View the CMR FAQ Contact the CMR team Follow us on TwitterMoodys Analytics markets and distributes all Moodys Capital Markets Research, Inc. materials. Moodys Capital Markets Research,Inc. is a subsidiary of Moodys Corporation. Moodys Analytics does not provide investment advisory services or products.For further detail, please see the last page.BNP ParibasBNP Paribas: Market-Implied Ratings Improve from Recent Lows Each of BNP Paribass market-implied ratings has now advanced from its lowest point over the last 90 days.The banks EDF'-implied rating rose two notches, to Ba2 (Figure 1). The bond-implied rating is up one notch to Aa2. It briefly reached Aa1 on two occasions, but was unable to sustain that advance. Three months ago the banks CDS-implied rating was Baa1, its current level. Since March 16, 2015, it declined to a bottom of Baa2 and made a plateau of A3 before returning to Baa1.FIGURE 1. BNP PARIBAS: MOODYS AND MARKET-IMPLIED RATINGS, LAST 90 DAYS (DAILY DATA)According to our ratings gap-conditioned transition matrices, companies rated A1 with a bond-implied rating of Aa2 outperformed the broad market 13% of the time over the following 12 months, matched the markets performance 13% of the time, and underperformed the broad market 74% of the time.Readers will recall that when a market-implied rating rises, the underlying securities have outperformed the broad market.1MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 18 March 2016 BNP Paribas: BNP Paribas: Market-Implied Ratings Improve from Recent LowsBNP Paribass CDS-implied ratings gap is now -3 notches, identical to the level three months ago (Figure 2). The CDS-implied ratings gap slipped to -4 notches on multiple dates over the prior three months. Since December 16, 2015, BNPs bond-implied ratings gap has moved from its low of +1 notch to +2 notches. The EDF-im...
