FINANCIAL INSTITUTIONSISSUER COMMENT 15 JUNE 2015BARCLAYS PLC (BARC)Moodys Senior Unsecured Rating Baa3Moodys Outlook STABond-Implied Rating Baa1CDS-Implied Rating NAEDF-Implied Rating Ba1As of 6/10/2015ANALYST 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 ReviewBarclays PLCs Two Market-Implied Ratings Follow Different Paths Over the last three months the bond-implied rating for Barclays PLC fell while the EDF'-implied rating advanced. But the market signals for Barclays PLC remain strong. Barclays is one of the ten largest global banking organizations. (Appendix 1).The banks bond-implied rating worsened by one notch to Baa1 over the last 90 days (Figure 1), fluctuating between A2 and Baa1 on multiple occasions. The EDF'-implied rating rose over the last three months from Ba3 to Ba1. It did not shift following the announcement of new leadership at Barclays PLC. We do not publish a CDS-implied rating for Barclays PLC; however, the CDS-implied rating for Barclays Bank is Baa1. It was A3 three months ago.FIGURE 1. BARCLAYS PLC: MOODYS AND MARKET-IMPLIED RATINGS, LAST 90 DAYS (DAILY DATA)MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 15 JUNE 2015 MARKET SIGNALS REVIEW : BARCLAYS PLCS TWO MARKET-IMPLIED RATINGS FOLLOW DIFFERENT PATHSAccording to our ratings gap-conditioned transition matrices, companies rated Baa3 with a bond-implied rating of Baa1 outperformed the broad market 21% of the time over the following 12 months, matched the markets performance 26% of the time, and underperformed the broad market 50% of the time.Barclays PLCs market-implied ratings gaps reflect the two notch downgrade of its Moodys rating to Baa3 on May 28, 2015. The bond-implied ratings gap is +2 notches, improved from zero notches three ...
