FINANCIAL INSTITUTIONSISSUER COMMENT 20 April 2016RATINGSJP MORGAN CHASE&CO. (JPM) Moodys SR Unsecured Rating A3Moodys Outlook STABond-Implied Rating A2CDS-Implied Rating A3EDF-Implied Rating Baa1As of April 19, 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 Rally Recently Two of JP Morgan Chase&Co.s three market-implied ratings improved over the last three months. The CDS- and the bond-implied ratings each advanced by two notches from their lowest levels. The EDF'-implied rating matches its level of January 19, 2016.First-quarter financial data released on April 13 (please see Q1 2016 Results Commentary below) had no immediate effect on JPMs market-implied ratings. Nor did the announcements on the same day by the Fed and FDIC that JPMs living will did not adequately address several key issues.FIGURE 1. JPMORGAN CHASE&CO.: MOODYS AND MARKET-IMPLIED RATINGS LAST 90 DAYS (DAILY DATA)JPMs CDS-implied rating is A3, one notch higher than the Baa1 observed 90 days ago, and two notches above its most recent low point of Baa2 in February 2016 (Figure 1). JPMs five-year CDS mid-spread is 68 bp versus 85 bp three months ago and 62 bp one year ago.MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 20 April 2016 Market Signals Review: JPM: Two Market-Implied Ratings Rally RecentlyThe companys bond-implied rating is A2, which is one notch over the A3 bond-implied rating seen on January 19 and two notches higher than its most recent nadir of Baa1 on February 26.The EDF'-implied rating is Baa1 and has been at this level since July 17 of last year. One year ago the EDF-implied rating was Baa2.Readers will recall that when an implied rating strengthens, the underlying securities have out...
