FINANCIAL INSTITUTIONSISSUER COMMENT 14 March 2016RATINGSDEUTSCHE BANK AG (DB) Moodys SR Unsecured Rating Baa1Moodys Outlook NEGBond-Implied Rating A3CDS-Implied Rating Ba2EDF-Implied Rating B3As of March 10, 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 ReviewDeutsche Bank AG: Three Market-Implied Ratings Stage Modest Rebound While the market signals for Deutsche Bank have weakened from their levels 90 days ago, they all staged a small recovery recently. The long-term movements in market-implied ratings may highlight the stresses of the banks ambitious restructuring plan. We attribute the current improvement to the banks willingness and capacity to pay alternative tier 1 (AT1) coupons and its recent debt buyback, which many investors likely viewed as a signal of strength.The CDS-implied rating was Baa2 three months ago. In March it fell to Ba3 on multiple dates, but on March 9 it climbed one notch to its present level of Ba2 (Figure 1).FIGURE 1. DEUTSCHE BANK: MOODYS AND MARKET-IMPLIED RATINGS, LAST 90 DAYS (DAILY DATA)The EDF'-implied rating was B1 on December 10, 2015. It slumped to Caa2 on one day (February 9) before recently improving from Caa1 on March 9 to B3 at present.DBs bond-implied rating was A1 90 days ago. Since then it moved down to a low point of Baa1 on February 19. It rebounded to A3 on February 22 and has remained there.MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 14 March 2016 Market Signals Review: Deutsche Bank AG: Three Market-Implied Ratings Stage Modest ReboundAccording to our ratings gap-conditioned transition matrices, companies rated Baa1 with a bond-implied rating of A3 outperformed the broad market 25% of the time over the following 12 months, matched the markets performance 14% of ...
