CORPORATESISSUER COMMENT 8 March 2016RATINGSAPPLE, INC. (AAPL) Moodys SR Unsecured Rating Aa1Moodys Outlook STABond-Implied Rating Aa1CDS-Implied Rating A3EDF-Implied Rating A2As of March 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 ReviewApple, Inc.: Market Signals Steady Apples bond- , CDS-, and EDF'-implied ratings all match their levels of three months ago (Figure 1).Apples bond-implied rating of Aa1 is also identical to its level of one year ago, three years ago, and five years ago.Apples CDS contracts are somewhat illiquid and accordingly we do not publish a CDS-implied rating every day for the company. The current CDS-implied rating is Aa3. Over the last three months it fluctuated between Aaa and Aa3. During the past 12 months, it fluctuated between Aaa and A1.The EDF-implied rating is A2. It dipped to A3 between mid-December 2015 and early-February 2016, and recovered to A2 on February 5.FIGURE 1. APPLE: MOODY'S AND MARKET-IMPLIED RATINGS, LAST THREE MONTHS (MONTHLY DATA)Readers will recall that when a market-implied rating is unchanged, the underlying securities have matched the performance of the broad market.1MOODY'S ANALYTICS CORPORATES2 8 March 2016 Market Signals Review: Apple, Inc.: Market Signals SteadyThe bond-implied ratings gap is zero notches, the same as it was on December 4, 2015 (Figure 2). The CDS-implied ratings gap was -2 notches three months ago and is at that level today. The EDF-implied ratings gap is -4 notches, unchanged from 90 days ago. Readers will recall that when a market-implied ratings gap is unchanged the underlying securities have matched the performance of the broad market, while if it widens the underlying securities have underperformed the broad market.FIGURE 2. ...
