CORPORATESISSUER COMMENT 3 NOVEMBER 2015GOODYEAR TIRE&RUBBER COMPANY (GT)Moodys Senior Unsecured Rating Ba3Moodys Outlook STABond-Implied Rating Ba2CDS-Implied Rating Ba2EDF-Implied Rating Baa1As of 11/02/2015ANALYST 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 ReviewGoodyear: Two Market-Implied Ratings Roll Higher The CDS- and EDF'-implied ratings for Goodyear are better than their levels of three months ago (Figure 1). The bond-implied rating matches its level then.The companys CDS-implied rating is Ba2. Over the last 90 days it briefly dipped to Ba1 and presently is one notch better than the Ba3 observation on August 2.Goodyears EDF'-implied rating is Baa1. Three months ago it stood at Baa2, so it too has climbed by one notch. The Baa1 observation equals the best level seen over the last five years.FIGURE 1. GOODYEAR: MOODYS AND MARKET-IMPLIED RATINGS, 90 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES2 3 NOVEMBER 2015 MARKET SIGNALS REVIEW: GOODYEAR: TWO MARKET-IMPLIED RATINGS ROLL HIGHERThe bond-implied rating was Ba2 three months ago, and it matches that level today. In the interim it varied between a low of Ba3 and a peak of Ba1.According to our ratings gap-conditioned transition matrices, companies rated Ba3 with a bond-implied rating of Ba2 outperformed the broad market 43% of the time over the following 12 months, matched the markets performance 9% of the time, and underperformed the broad market 48% of the time.Readers will recall that when a market-implied rating is unchanged the underlying securities have matched the performance of the broad market, and when an implied-rating rises the underlying securities have outperformed the broad market. 1Goodyears CDS- and EDF-implied ratings gaps both ...
