FINANCIAL INSTITUTIONSISSUER COMMENT 30 JUNE 2015COMMERZBANK AG(CBK)Moodys Senior Unsecured Rating Baa1Moodys Outlook POSBond-Implied Rating A2CDS-Implied Rating Baa3EDF-Implied Rating B2As of 6/29/2015ANALYST 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 ReviewCommerzbank AG: Two Market-Implied Ratings Move Up, One Moves Down Over the last three months the bond- and EDF' implied ratings for Commerzbank rose while the CDS-implied rating deteriorated. Overall, the market signals for Commerzbank remain strong.FIGURE 1. COMMERZBANK : MOODYS AND MARKET-IMPLIED RATINGS, LAST 90 DAYS (DAILY DATA)The banks bond-implied rating improved by one notch from A3 to A2 over the last 90 days (Figure 1). It climbed to A1 on numerous dates during the period but was unable to sustain the advance.MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 30 JUNE 2015 MARKET SIGNALS REVIEW : COMMERZBANK AG: TWO MARKET-IMPLIED RATINGS MOVE UP, ONE MOVES DOWNThe EDF'-implied rating rose over the last three months from B3 to B2. It ascended to a plateau of B1 on several dates, but subsequently retreated.CDS-implied rating for Commerzbank was Baa2 on March 30, and has now slipped to Baa3.According to our ratings gap-conditioned transition matrices, companies rated Baa1 with a bond-implied rating of A2 outperformed the broad market 22% of the time over the following 12 months, matched the markets performance 10% of the time, and underperformed the broad market 69% of the time.The bond-implied ratings gap is +2 notches, improved by a notch from three months ago (Figure 2). The EDF-implied ratings gap also progressed by one notch, to -7 notches. Commerzbanks CDS-implied ratings gap receded from -1 notch to -2 notches.Readers will recall that when a ma...
