CORPORATESISSUER COMMENT 24 NOVEMBER 2015ARCELORMITTAL (MT)Moodys Senior Unsecured Rating Ba2Moodys Outlook NEGBond-Implied Rating B1CDS-Implied Rating Caa1EDF-Implied Rating Caa1As of 11/23/2015ANALYST 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 ReviewArcelorMittal: All Market-Implied Ratings Fall ArcelorMittals bond-, CDS- and EDF'-implied ratings each declined over the last three months (Figure 1). Investors likely reacted to concerns over lower commodity prices and the weakening of Chinas economy.The companys bond-implied rating slipped three notches from Ba1 a year ago to B1, its weakest level of the last five years. Over the last three months the CDS-implied rating weakened from B2 to a five-year low point of Caa1. The EDF-implied rating retreated over the last three months from B3 to Caa1, a nadir not observed since November 2014.FIGURE 1. ARCELORMITTAL: MOODYS AND MARKET-IMPLIED RATINGS, LAST 90 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES2 24 NOVEMBER 2015 MARKET SIGNALS REVIEW: ARCELORMITTAL: ALL MARKET-IMPLIED RATINGS FALLAccording to our ratings gap-conditioned transition matrices, companies rated Ba2 with a bond-implied rating of B1 outperformed the broad market 5% of the time over the following 12 months, matched the markets performance 8% of the time, and underperformed the broad market 38% of the time.Readers will recall that when a market-implied rating is unchanged, the underlying securities have matched the performance of the broad market. However, when an implied rating falls, as occurred with ArcelorMittal, the underlying securities have underperformed the broad market. 1The EDF-implied ratings gap is -5 notches, as it was three months ago, and includes the effect of the Moody's (MIS)...
