FINANCIAL INSTITUTIONSISSUER COMMENT 8 DECEMBER 2015BBT CORPORATION (BBT)Moodys Senior Unsecured Rating A2Moodys Outlook STABond-Implied Rating A2CDS-Implied Rating naEDF-Implied Rating A3As of 12/2/2015ANALYST 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 ReviewBB&T Corporation: Two Market-Implied Ratings Rebound Over the last 90 days, BBTs EDF'-implied rating advanced a notch to A3, while its bond-implied rating climbed two notches to A2.EDF (Expected Default Frequency) credit measures show consistency for BBT recently. The banks current EDF-implied rating is A3 with a one-year EDF measure of 0.21%, just 2 bp worse than its 0.19% observation one year ago and significantly better than its 0.94% and Ba2 EDF-implied rating of five years ago.FIGURE 1. BBTS EDF MEASURE VS. US COMMERCIAL BANKS PEER GROUPThe main drivers of the small EDF movement in the last year were the slightly higher asset volatility and market leverage. Asset volatility, which measures business risk, increased by 15 bp on an absolute basis from 4.43% to 4.58%, and market leverage, which measures financial risk, rose by 51 bp on an absolute basis from 66.15% to 66.66%.BBTs EDF measure currently is tied with 11 other banks as 27th best in its peer group of 425 US commercial banks. In Figure 1, BBTs EDF measure is shown as the blue line and was mostly better than the 25th percentile (the green line) over the past twelve months. ItMOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 8 DECEMBER 2015 MARKET SIGNALS REVIEW: BB&T CORPORATION: TWO MARKET-IMPLIED RATINGS REBOUNDshifted to the band between the 25th and 50th percentile in September 2015 and remains there today. The banks in the best quartile (with the lowest EDF measures) of this peer group have a...
