CORPORATESISSUER COMMENT 11 May 2016RATINGSALLSTATE CORP. (ALL) Moodys SR Unsecured Rating A3Moodys Outlook STABond-Implied Rating A3CDS-Implied Rating A1EDF-Implied Rating [The Kraft Heinz Co. (KHC)]A3As of May 10, 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.Market Signals ReviewAllstate: Market Signals Bow to Hurricane Season With the advent of the hurricane season, Allstates market-implied ratings generally worsened in ten of the last eleven years, 2009 being the sole exception. The market signals generally deteriorated either just before or early in the Atlantic hurricane season (June 1 through November 30) and rebounded as the hurricane season ended (Figures 6-16). The timing of the pattern is not precise, but it is directionally consistent and has implications for market performance.FIGURE 1. ALLSTATE: MOODYS AND MARKET-IMPLIED RATINGS, LAST 12 MONTHS (DAILY OBSERVATIONS)With all three of Allstates market signals recently moving a bit lower (Figure 1), investors may wish to consider this history, to best position risk exposure in the company. The record indicates that going short credit risk in ALL around the start of the hurricane season and then returning to a risk-on position in ALL towards the close of the hurricane season will lead to the best market performance. Since the bond-, EDF'-, and CDS-implied ratings recently moved down slightly, investors may wish to monitor them. Currently they are above the seasonal low points reached in most previous years. Moodys affirmed its stable outlook onMOODY'S ANALYTICS CORPORATES2 11 May 2016 Market Signals Review: Allstate: Market Signals Bow to Hurricane SeasonALL debt and insurance financial strength ratings on January 7, 2016 (please see ratings view section below).FIG...
