FINANCIAL INSTITUTIONSISSUER COMMENT 21 April 2016RATINGSBANK OF AMERICA CORPORATION (BAC) Moodys SR Unsecured Rating Baa1Moodys Outlook STABond-Implied Rating Baa2CDS-Implied Rating Baa2EDF-Implied Rating Baa1As of April 21, 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 ReviewBank of America Corp.: Two Market Signals Weaken Two of Bank of America Corp.s three market-implied ratings recently fell below their best levels of the last 90 days. Readers will recall that when an entitys market-implied ratings fall, the underlying securities have underperformed the broad market.First-quarter financial data released on April 14 (please see Q1 2016 Results Commentary below) had no immediate effect on BACs market-implied ratings. Nor did the announcements on April 13 by the Fed and FDIC that BACs living will did not adequately address several key issues.FIGURE 1. BANK OF AMERICA CORP.: MOODYS AND MARKET-IMPLIED RATINGS, LAST 90 DAYS (DAILY DATA)The companys bond-implied rating was Baa1 90 days ago and moved up to A3 briefly on three occasions over the period. Since late March the most frequent observation has been the current level of Baa2 (Figure 1).The EDF'-implied rating was A3 three months ago. On March 7 it declined to Baa1, where it remains.MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 21 April 2016 Market Signals Review: Bank of America Corp.: Two Market Signals WeakenThe CDS-implied rating for BAC now matches the Baa2 level seen on January 20; in the interim it fluctuated between that level and Baa3. BACs five-year CDS mid-spread of 83 bp compares to such peers as Wells Fargo (56 bp), JP Morgan Chase (63 bp), Citigroup (83 bp), Morgan Stanley (89 bp), and Goldman Sachs (94 bp).Our ratings gap-conditioned transit...
