FINANCIAL INSTITUTIONSISSUER COMMENT 28 JULY 2015AMERICAN EXPRESS COMPANY (AXP)Moodys Senior Unsecured Rating A3Moodys Outlook STABond-Implied Rating Baa1CDS-Implied Rating A2EDF-Implied Rating A3As of 7/27/2015ANALYST 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.This report has been republished on 1 July 2015 with the correction to Outlook in the ratings box from POS to STA.Market Signals ReviewAmerican Express Co.: CDS-Implied Rating Rises The CDS-implied rating for American Express was A3 three months ago; it is now A2. The bond- and EDF'-implied ratings are the same levels now they were then. The CDS-implied rating for American Express fluctuated within a narrow range between A2 and A3 over the last 12 months. Most recently it climbed to A2 on July 24 (Figure 1). American Expresss bondimplied rating frequently varied between a low of Baa1 and a high of A3 since April 27. The current Baa1 matches the level 90 days ago. Its best level over the last five years was A2, with the exception of a single day (June, 14, 2014) when it reached the A1 level.FIGURE 1. AMERICAN EXPRESS CO.: MOODYS AND MARKET-IMPLIED RATINGS, LAST 90 DAYS (DAILY DATA)MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 28 JULY 2015 MARKET SIGNALS REVIEW : AMERICAN EXPRESS CO.: CDS-IMPLIED RATING RISESWhile the EDF-implied rating was A3 every day over the last three months, over the last 12 months it reached a high point of A1 on several dates, but was unable to sustain it.AXPs five-year CDS mid-spread is presently 52 bp, among the best for the major US banking institutions. At present only The Bank of NY Mellon (39 bp) has a tighter CDS spread and Wells Fargo&Co. is a close second with 55 bp.Readers will recall that when a market-implied rating rises, the unde...
