FINANCIAL INSTITUTIONSISSUER COMMENT 3 JUNE 2015GENERAL ELECTRIC CAPITAL CORP (GECC)Moodys Senior Unsecured Rating A1Moodys Outlook STABond-Implied Rating A2CDS-Implied Rating A2EDF-Implied Rating NAAs of 6/1/2015ANALYST 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 ReviewGECCs CDS- and Bond-Implied Ratings Converge Over the last 90 days the fixed income oriented market signals for GECC have equalized, with the CDS-implied rating rising from Baa2 to A2 and the bond-implied rating falling from A1 to A2.The CDS-implied rating began moving up from its recent low point of Baa2 on April 6, reaching A2 on April 13, where it remains (Figure 1). The bond-implied rating is presently A2, after declining from A1 three months ago.FIGURE 1. GECC: MARKET-IMPLIED RATINGS - LAST THREE MONTHS (DAILY DATA)MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 3 JUNE 2015 MARKET SIGNALS REVIEW : GECCS CDS- AND BOND-IMPLIED RATINGS CONVERGEThe CDS-implied ratings gap narrowed from -3 notches to -1 notch over the last 90 days (Figure 2). The bond-implied ratings gap is also currently -1 notch; it was at zero notches 90 days ago.FIGURE 2. GECC: MOODYS AND MARKET-IMPLIED RATINGS GAPS IN THE LAST THREE MONTHS (DAILY DATA)MOODY'S ANALYTICS FINANCIAL INSTITUTIONS3 3 JUNE 2015 MARKET SIGNALS REVIEW : GECCS CDS- AND BOND-IMPLIED RATINGS CONVERGEGECC management announced a significant change in strategy in May 2013: the wind-down of GEs investment in GECCs consumer finance arm. Investors have maintained their raised estimations of the credit quality of GECC since those initial announcements, keeping the market-implied ratings and the market-implied ratings gaps at their higher levels. We note that GECCs market-implied ratings are at the...
