CORPORATESISSUER COMMENT 6 May 2016RATINGSFREEPORT-MCMORAN INC. (FCX) Moodys SR Unsecured Rating B2Moodys Outlook NEGBond-Implied Rating naCDS-Implied Rating Caa1EDF-Implied Rating Caa1As of May 4, 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 ReviewFreeport-McMoRan Inc.: Market Signals Rally, Then Retreat The CDS- and EDF'-implied ratings for Freeport-McMoRan Inc. began in February to rally off their low points. This recently came to a halt and the ratings dipped slightly again.The CDS-implied rating fell to C (its lowest possible observation) in January and February (Figure 1). It rebounded to Ba in late April and early May, but has now slid backwards to Caa1.The EDF'-implied rating staged a recovery to B3 from a bottom of Caa3 (a level equal to its lowest point over the last five years) on multiple dates in December 2015 through February 2016 to B3. It recently dipped from that recent peak to Caa1.We do not publish a bond-implied bond rating for FCX.FIGURE 1. FREEPORT-MCMORAN INC.: MOODYS AND MARKET-IMPLIED RATINGS, LAST 365 DAYS (DAILY DATA)According to our ratings gap-conditioned transition matrices, companies rated B2 with a CDS-implied rating of Caa1 outperformed the broad market 56% of the time overMOODY'S ANALYTICS CORPORATES2 6 May 2016 Market Signals Review: Freeport-McMoRan Inc.: Market Signals Rally, Then Retreatthe following 12 months, matched the markets performance 10% of the time, and underperformed the broad market 34% of the time.Readers will recall that when a market-implied rating rises the underlying securities have outperformed the broad market and when it falls the underlying securities have underperformed the broad market.1Over the last three months, Freeport-McMoRan Inc.s CDS-implie...
