CORPORATESISSUER COMMENT 26 MAY 2015CONAGRA FOODS, INC. (CAG)Moodys Senior Unsecured Rating Baa2Moodys Outlook STABond-Implied Rating Baa3CDS-Implied Rating Baa2EDF-Implied Rating A2As of 5/21/2015ANALYST 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 ReviewConAgra Foods, Inc.: Fixed Income Market-Implied Ratings Drop The CDS- and bond-implied ratings for ConAgra have both moved lower recently and matched their worst levels of the last three years.A year ago the CDS-implied rating for ConAgra was Baa1 (Figure 1). In December of 2014 it began a gradual ascent to A3 and then slipped lower by two notches to Baa2. The bond-implied rating for ConAgra was A3 a year ago. It fell to Baa2 in August 2014, and dipped further to Baa3 in April. ConAgras EDF-implied rating was Baa2. In December it moved up to A2, and then varied between A3 and A2, where it stands now.FIGURE 1. CONAGRA: MOODYS AND MARKET-IMPLIED RATINGS, LAST 365 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES2 26 MAY 2015 MARKET SIGNALS REVIEW : CONAGRA FOODS, INC.: FIXED INCOME MARKET-IMPLIED RATINGS DROPAccording to our ratings gap-conditioned transition matrices, companies rated Baa2 with a bond-implied rating of Baa2 outperformed the broad market 44% of the time over the following 12 months, matched the markets performance 30% of the time, and underperformed the broad market 25% of the time.ConAgra's EDF-implied ratings gap advanced from zero a year ago to +2 notches now; however, the current level is three notches below its recent apex of +5 notches (Figure 2). The bond-implied ratings gap weakened from +1 notch 12 months ago to zero notches. The CDS-implies ratings gap is +3 notches, lower by three notches from the recent peak of +6 notches, but one notch...
