CORPORATESISSUER COMMENT 9 March 2016RATINGSFORD MOTOR COMPANY (F) Moodys SR Unsecured Rating Baa2Moodys Outlook STABond-Implied Rating Baa2CDS-Implied Rating Ba1EDF-Implied Rating Ba1As of March 7, 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 ReviewFord Motor Co.: Two Market Signals Move Up Two of Fords market signals advanced over the last 30 days, reflecting investor comfort with the companys results, and Moodys recent debt rating upgrade. The bond-implied rating climbed by one notch to Baa2, matching its highest level of the year, and the EDF'-implied rating shifted up by a notch to Ba1 (Figure 1). The CDS-implied rating has been steady over the last month at Ba1.The bond-implied rating varied from Baa2 to Ba1 over the last 12 months. The EDF'-implied rating was Ba2 a year ago, and moved between Ba3 and Ba1 over the period. The CDS-implied rating on March 7, 2015 was Baa3, a notch higher than today.FIGURE 1. FORD: MOODYS AND MARKET-IMPLIED RATINGS, LAST 30 DAYS (DAILY DATA)Over the last year, the bond-implied ratings gap moved between zero and +1 notch and is now at zero notches (Figure 2). The CDS-implied ratings gap weakened from zero to -2 notches. The EDF-implied ratings gap remained at -2 notches.Our ratings gap-conditioned transition matrices show that historically companies rated Baa2 with a bond-implied ratings gap of zero notches outperformed the broad market 34% of theMOODY'S ANALYTICS CORPORATES2 9 March 2016 Market Signals Review: Ford Motor Co.: Two Market Signals Move Uptime, matched the markets performance 17% of the time, and underperformed the market 50% of the time over the following 12 months.Readers will recall that when an implied rating improves, the underlying securities have outp...
