CORPORATESISSUER COMMENT 20 April 2016RATINGSCHEVRON CORPORATION (CVX) Moodys SR Unsecured Rating Aa2Moodys Outlook STABond-Implied Rating Aa3CDS-Implied Rating Baa3EDF-Implied Rating Baa1As of April 18, 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 ReviewChevron Corp.: Two Market-Implied Ratings Rebound The bond- and EDF'-implied ratings for Chevron have recovered from their five-year low points of earlier this year. The CDS-implied rating remains at Baa3, the weakest observation seen over the last 60 months.The bond-implied rating is now Aa3 (Figure 1). It had deteriorated to A3 on multiple days from January into March 2016, the weakest levels over the last five years. It has advanced by three notches to Aa3 since March 4.The EDF-implied rating was Aa2 a year ago. It worsened to Baa3 on multiple dates over the last year, but since March 1 ascended by two notches to Baa1 from its low of Baa3.The companys CDS-implied rating moved down by four notches from Aa1 last June to a five-year nadir of Baa3 on various dates in March and April 2016. It climbed above that a few times, but the rise proved to be unsustainable and the CDS-implied rating is once again Baa3.FIGURE 1. CHEVRON: MOODYS AND MARKET-IMPLIED RATINGS, LAST 365 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES2 20 April 2016 Market Signals Review: Chevron Corp.: Two Market-Implied Ratings ReboundAccording to our ratings gap-conditioned transition matrices, companies rated Aa2 with a bond-implied rating of Aa3 outperformed the broad market 13% of the time over the following 12 months, matched the markets performance 10% of the time, and underperformed the broad market 76% of the time.Readers will recall that when a market-implied rating rises the underlying...
