CORPORATESISSUER COMMENT 6 April 2016RATINGSAMAZON.COM, INC. (AMZN) Moodys SR Unsecured Rating Baa1Moodys Outlook STABond-Implied Rating Aa3CDS-Implied Rating A1EDF-Implied Rating A1As of April 4, 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 ReviewAmazons Market-Implied Ratings Rebound Amazon.coms bond-, CDS-, and EDF-implied ratings dropped briefly over the last 90 days, but have recovered.The companys bond-implied rating weakened from A1 to A2 in mid-to late February. It then rebounded to Aa1, a level it had last achieved in mid-December 2015 (Figure 1).The CDS-implied rating is A1, identical to its level three months ago. However, on multiple dates throughout March it slipped to A2, and lately staged a small rally. Given the illiquidity of Amazons CDS contracts, we would place less reliance on this market signal.Amazons EDF-implied rating was Aa2 90 days ago. It worsened by three notches to A2 for much of February and March and has now made a partial recovery to A1.FIGURE 1. AMAZON: MOODYS AND MARKET-IMPLIED RATINGS, 90 DAYS (DAILY DATA)According to our ratings gap-conditioned transition matrices, companies rated Baa1 with a bond-implied rating of Aa3 outperformed the broad market 14% of the timeMOODY'S ANALYTICS CORPORATES2 6 April 2016 Market Signals Review: Amazons Market-Implied Ratings Reboundover the following 12 months, matched the markets performance 8% of the time, and underperformed the broad market 78% of the time.Over the last three months, Amazons bond-implied ratings gap lessened from +3 notches to +2 notches but then rebounded to +4 notches (Figure 2). The +5 notch EDF-implied ratings gap shrank to +2 notches before recovering to +3 notches. The CDS-implied ratings gap today matches i...
