FINANCIAL INSTITUTIONSISSUER COMMENT 16 JUNE 2015AGRICULTURAL BANK OF CHINA LTD. (ACGBY)Moodys Senior Unsecured Rating A1Moodys Outlook STABond-Implied Rating NACDS-Implied Rating Ba1EDF-Implied Rating B1As of 6/12/2015ANALYST CONTACTSAllerton 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.Market Signals ReviewAgricultural Bank of China, Ltd.: EDF-Implied Rating Falls The EDF'-implied rating for Agricultural Bank of China Ltd. worsened over the last year, while the CDS-implied rating did not change. According to Moodys Bank Financial Metrics, Agricultural Bank of China Ltd. is one of the ten largest banks in the world, ranked by assets, which are $2.6 trillion (see Appendix 1, below).FIGURE 1. AGRICULTURAL BANK OF CHINA LTD.: MOODYS AND MARKET-IMPLIED RATINGS, LAST 365 DAYS (DAILY DATA)The EDF-implied rating fell three notches over the last year from Ba1 to B1 (Figure 1), reflecting the deterioration in the companys one-year EDF metric from 0.53% to 1.00%.MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 16 JUNE 2015 MARKET SIGNALS REVIEW : AGRICULTURAL BANK OF CHINA, LTD.: EDF-IMPLIED RATING FALLSTwelve months ago the banks CDS-implied rating was Ba1, which matches its current level. In the interim it varied between Ba1 and Baa3 (Figure 1).We do not publish a bond-implied rating for Agricultural Bank of China because none of its debt securities fit our model.According to our ratings gap-conditioned transition matrices, companies rated A1 with a bond-implied rating of Ba1 outperformed the broad market 46% of the time over the following 12 months, matched the markets performance 11% of the time, and underperformed the broad market 35% of the time.Agricultural Bank of China Ltd.s CDS-implied ratings gap is now -6 notches, identical to its level 12 ...
