CORPORATESISSUER COMMENT 20 MAY 2015EXXON MOBIL CORPORATION (XOM)Moodys Senior Unsecured Rating AaaMoodys Outlook STABond-Implied Rating Aa2CDS-Implied Rating Aa1EDF-Implied Rating AaaAs of 5/19/2015ANALYST 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. Thepublications 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 ReviewExxon Mobil: Two Market-Implied Ratings Dip Despite the modest rise in oil prices, the CDS- and bond-implied ratings for Exxon both worsened over the last 90 days.We do not believe that these recent slips signal a worsening of Exxons creditworthiness. On the contrary, Exxon Mobils unique, highly-rated credit status has dampened the impact on the company of the global drop in oil prices.FIGURE 1. EXXON: MOODYS AND MARKET-IMPLIED RATINGS, LAST THREE MONTHS (DAILY DATA)Exxon reaffirmed its flexibility by indicating it will defer expansion in some areas and reduce exposures to its businesses with the weakest profit margins, while at the same time boosting output by 2017. It is the only integrated oil company rated Aaa among a group of highlyMOODY'S ANALYTICS CORPORATES2 20 MAY 2015 MARKET SIGNALS REVIEW : EXXON MOBIL: TWO MARKET-IMPLIED RATINGS DIPrated peers (Chevron, Royal Dutch Shell, and Total), and one of only three Aaa industrial companies (please see MIS Credit Opinion below). Over the last three months, the CDS-implied rating for Exxon dropped a notch to Aa1, from Aaa. The bond-implied rating is Aa2, two notches down. (Figure 1.)Exxons EDF'-implied rating of Aaa has not changed, nor has the EDF measure (0.01%), over the last three months. The last time the EDF-implied rating slipped below Aaa was in September 2012.According to our ratings gap-conditioned transition matrices, companies rated Aaa with a bond-implied rating of Aa2 outperformed the broad...
