CORPORATESISSUER COMMENT 12 OCTOBER 2015HALLIBURTON COMPANY (HAL)Moodys Senior Unsecured Rating A2Moodys Outlook STABond-Implied Rating A3CDS-Implied Rating A3EDF-Implied Rating Ba1As of 10/8/2015ANALYST 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 ReviewHalliburton Company: Market-Implied Ratings Sink over Last Year The bond-, CDS-, and EDF'-implied ratings for Halliburton were all down over the last twelve months (Figure 1).The bond-implied rating worsened by one notch from A2 a year ago to its current level of A3 . Over the period it varied from Aa3 to Baa1. The companys CDS-implied rating is A3, down by one notch. Over the year it ranged from Baa3 to A2. Halliburtons EDF'-implied rating is Ba1. On several dates over the last three months it climbed to Baa3, but was unable to sustain that advance. Its low point over the last year was Ba3.FIGURE 1. HALLIBURTON: MOODYS AND MARKET-IMPLIED RATINGS, 365 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES2 12 OCTOBER 2015 MARKET SIGNALS REVIEW: HALLIBURTON COMPANY: MARKET-IMPLIED RATINGS SINK OVER LAST YEARAccording to our ratings gap-conditioned transition matrices, companies rated A2 with a bond-implied rating of A3 outperformed the broad market 32% of the time over the following 12 months, matched the markets performance 11% of the time, and underperformed the broad market 58% of the time.Readers will recall that when a market-implied rating falls the underlying securities have underperformed the broad market. 1Halliburtons bond-, CDS- and EDF-implied ratings gaps deteriorated over the last 12 months. The bond-implied ratings gap slipped down one notch to -1 notch (Figure 2). Its best level over the last year was +2 notches. The CDS-implied ratings gap is also no...
