CORPORATESISSUER COMMENT 27 April 2016RATINGSHALLIBURTON COMPANY (HAL) Moodys SR Unsecured Rating A2Moodys Outlook RURBond-Implied Rating Baa2CDS-Implied Rating Baa3EDF-Implied Rating Ba3As of April 26, 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 ReviewHalliburton Company: All Market-Implied Ratings Slip The bond-, CDS-, and EDF'-implied ratings for Halliburton are down from their best observations over the last three months.On April 25 HAL announced a delay in the release of its first-quarter 2016 earnings until May 3. Reports have circulated that HAL and Baker Hughes may not accomplish their pending merger, slated to be completed by April 30. Analysts have been divided as to whether the merger will close as scheduled, be delayed, or be terminated. Issues include an increasingly difficult regulatory environment and persistent low energy prices (as reflected by Baker Hughess disappointing earnings miss on April 27). HAL is presently the second largest oil and gas service provider in the world.The bond-implied rating for HAL worsened by one notch in late March to its current level of Baa2 (Figure 1). Over the last 90 days it varied from Ba3 to Baa1. The companys CDS-implied rating is Baa3, down by one notch from Baa2 in mid-March. Halliburtons EDF'-implied rating is Ba3, also down a notch from its mid-March peak.FIGURE 1. HALLIBURTON: MOODYS AND MARKET-IMPLIED RATINGS, 90 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES2 27 April 2016 Market Signals Review: Halliburton Company: All Market-Implied Ratings SlipAccording to our ratings gap-conditioned transition matrices, companies rated A2 with a bond-implied rating of Baa2 outperformed the broad market 37% of the time over the following 12 months, matched the mark...
