FINANCIAL INSTITUTIONSISSUER COMMENT 25 April 2016RATINGSTHE GOLDMAN SACHS GROUP, INC. (GS) Moodys SR Unsecured Rating A3Moodys Outlook STABond-Implied Rating A3CDS-Implied Rating Baa2EDF-Implied Rating Baa1As of April 21, 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 ReviewGoldman Sachs: All Market-Implied Ratings Advance Each of Goldman Sachss three market-implied ratings improved from its lowest observation over the last 90 days.First-quarter financial data released on April 19 (please see Q1 2016 Results Commentary below) had no immediate effect on GSs bond- and EDF'- implied ratings, despite their lackluster levels. Nor did the recent announcements by the Fed and FDIC that GSs living will had several shortcomings However, Goldman Sachss CDS-implied rating moved one notch higher from Baa3 to Baa2 on April 19.FIGURE 1. GOLDMAN SACHS: MOODYS AND MARKET-IMPLIED RATINGS - LAST 90 DAYS (DAILY DATA)The bond-implied rating for GS moved up from Baa1 three months ago to A3 (Figure 1). One year ago the bond-implied rating was Baa1 and over the last 365 days it fluctuated between Baa2 and A2.The EDF-implied rating was Baa2 on January 21, and since then climbed by one notch to Baa1.MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 25 April 2016 Market Signals Review: Goldman Sachs: All Market-Implied Ratings AdvanceThe CDS-implied rating of Baa2 is one notch better that the Baa3 level observed on most of the last 90 days. GSs five-year CDS mid-spread of 83 bp compares to such peers as Wells Fargo (56 bp), JP Morgan Chase (67 bp), Citigroup (84 bp), Bank America Corp (84 bp), and Morgan Stanley (91 bp),Our ratings gap-conditioned transition matrix (available under the Market Signals tab on Moodys CreditView) shows that the...
