FINANCIAL INSTITUTIONSISSUER COMMENT 3 AUGUST 2015AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD. (ANZ)Moodys Senior Unsecured Rating Aa2Moodys Outlook STABond-Implied Rating Aa2CDS-Implied Rating Baa1EDF-Implied Rating Baa2As of 7/29/2015ANALYST 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 ReviewAustralia and New Zealand Banking Group Ltd.: Bond-Implied Rating Rallies ANZs bond-implied rating improved over the last 90 days, rising by three notches to Aa2. The CDS- and EDF'-implied ratings each match their levels of three months ago, Baa1 and Baa2, respectively. (Figure 1.)Readers will recall that when an entitys implied ratings rise, the underlying securities have outperformed the broad market. 1FIGURE 1. ANZ: MOODYS AND MARKET-IMPLIED RATINGS, LAST 90 DAYS (DAILY DATA)MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 3 AUGUST 2015 MARKET SIGNALS REVIEW : AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD.: BOND-IMPLIED RATING RALLIESThe bond-implied rating has been higher than the current Aa2 levels just twice over the last five years. It reached Aaa on February 10 of this year and Aa1 on March 25 in each case just for a single day.The CDS-implied rating moved up to A3 on three occasions since April 29, but was unable to sustain that advance. ANZs five-year CDS mid-spread of 66 bp compares to such major banks as Wells Fargo (51 bp), Commonwealth Bank of Australia (64 bp), Westpac (66 bp), National Australia Bank (66 bp), Bank of America (70 bp), JP Morgan Chase (69 bp), Citigroup (79 bp), Morgan Stanley (80 bp), and Goldman Sachs (87 bp).The EDF-implied rating, now Baa2, stands one notch below its Baa1 of 12 ...
