FINANCIAL INSTITUTIONSISSUER COMMENT 29 January 2016RATINGSJP MORGAN CHASE&CO. (JPM) Moodys SR Unsecured Rating A3Moodys Outlook STABond-Implied Rating A3CDS-Implied Rating Baa1EDF-Implied Rating Baa1As of 1/27/2016ContactsAllerton 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 ReviewJPM: Two Market-Implied Ratings Are Above Their Year Ago Levels Two of JP Morgan Chase&Co.s three market-implied ratings improved over the last 12 months. The CDS- and the EDF'-implied rating each advanced by one notch. The bond-implied rating matches its level on January 27, 2015.The CDS-implied rating is Baa1, one notch higher than the Baa2 observed one year ago. On December 14 it rose from Baa2 to Baa1, where it remains (Figure 1).The EDF'-implied rating moved up from Baa2 one year ago to Baa1. In mid-July 2015, it briefly rose to A3. It remained unchanged at Baa1 since then.FIGURE 1. JPMORGAN CHASE&CO.: MOODYS AND MARKET-IMPLIED RATINGS LAST 365 DAYS (WEEKLY DATA)The bond-implied rating is A3, which is identical to its level one year ago. Over the period it ranged from a high of A1 to a low of Baa1 on numerous occasions. Immediately following the banks release of Q42015 earnings last week, the bond-implied rating slipped by a notch from A2 to A3.MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 29 January 2016 Market Signals Review: JPM: Two Market-Implied Ratings Are Above Their Year Ago LevelsReaders will recall that when an implied rating rises, the underlying securities have underperformed the broad market.Our ratings gap-conditioned transition matrices (available on Moodys CreditView) show that historically the bonds of a company rated A3 with a bond-implied ratings gap of zero notches (in this case a bond-implied rating of A3) have outperfo...
