CORPORATESISSUER COMMENT 10 SEPTEMBER 2015FREEPORT-MCMORAN INC. (FCX)Moodys Senior Unsecured Rating Baa2Moodys Outlook NEGBond-Implied Rating NACDS-Implied Rating B3EDF-Implied Rating Caa1As of 9/8/2015ANALYST 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 ReviewFreeport-McMoRan Inc.: Two Market-Implied Ratings Fluctuate Recently The CDS- and EDF'-implied ratings for Freeport-McMoRan Inc. have been volatile recently. The CDS-implied rating is down to B3 from B2 90 days ago (Figure 1). In the period it shifted between B3 and Caa1 on multiple occasions.The EDF'-implied rating staged a modest recovery from Caa2 to Caa1. It had recently dipped to Caa2, a level equal to its lowest point over the last five years. This market-implied rating was Caa1 on June 8, 2015. It moved up to B3 for two days in late June, but has more recently shifted between Caa2 and Caa1 on numerous dates.FIGURE 1. FREEPORT-MCMORAN INC.: MOODYS AND MARKET-IMPLIED RATINGS, LAST 90 DAYS (DAILY DATA)We do not publish a bond-implied bond rating for FCX.MOODY'S ANALYTICS CORPORATES2 10 SEPTEMBER 2015 MARKET SIGNALS REVIEW: FREEPORT-MCMORAN INC.: TWO MARKET-IMPLIED RATINGS FLUCTUATE RECENTLYAccording to our ratings gap-conditioned transition matrices, companies rated Baa3 with a CDS-implied rating of B3 outperformed the broad market 66% of the time over the following 12 months, matched the markets performance 5% of the time, and underperformed the broad market 29% of the time.Readers will recall that when a market-implied rating falls the underlying securities have underperformed the broad market. 1Over the last three months, Freeport-McMoRan Inc.s CDS-implied ratings gap widened from -5 notches to -6 notches (Figure 2). The EDF-implied ratings gap ...
