FINANCIALSISSUER COMMENT 9 March 2016RATINGSBARCLAYS PLC (BARC) Moodys SR Unsecured Rating Baa3Moodys Outlook STABond-Implied Rating Baa3CDS-Implied Rating Ba1EDF-Implied Rating Ba3As of March 8, 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 ReviewBarclays PLC: Market-Implied Ratings Weaken Over the last twelve months the bond- and CDS-implied ratings for Barclays PLC fell. Two market-implied ratings now match their worst level of the prior five years. The EDF'-implied rating fell and then recently advanced one notch off its low point.The banks bond-implied rating worsened by four notches from A2 to Baa3 over the last 365 days (Figure 1). It fluctuated between A2 and Baa1 on multiple occasions.The EDF'-implied rating was Ba2 a year ago. It fell on March 1 to a recent low point of B1 (its weakest since November 2012), but has now recovered to Ba3. It currently stands three notches lower than the Baa3 level of December 2015.The CDS-implied rating for Barclays PLC is Ba1. Its highest observation over the last year was A3. The CDS contract for Barclays PLC is somewhat illiquid, and accordingly we do not publish a CDS-implied rating for the company each day.FIGURE 1. BARCLAYS PLC: MOODYS AND MARKET-IMPLIED RATINGS, LAST 365 DAYS (DAILY DATA)MOODY'S ANALYTICS FINANCIALS2 9 March 2016 Market Signals Review: Barclays PLC: Market-Implied Ratings WeakenAccording to our ratings gap-conditioned transition matrices, companies rated Baa3 with a bond-implied rating of Baa3 outperformed the broad market 36% of the time over the following 12 months, matched the markets performance 15% of the time, and underperformed the broad market 49% of the time.Barclays PLCs current market-implied ratings gaps reflect the two notch downgr...
