FINANCIAL INSTITUTIONSISSUER COMMENT 22 JULY 2015JP MORGAN CHASE&CO. (JPM)Moodys Senior Unsecured Rating A3Moodys Outlook STABond-Implied Rating A2CDS-Implied Rating Baa1EDF-Implied Rating A3As of 7/20/2015ANALYST 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.This report has been republished on 1 July 2015 with the correction to Outlook in the ratings box from POS to STA.Market Signals ReviewJPM's Market-Implied Ratings Follow Different Paths over the Last Two Months JP Morgan Chase&Co.s three market-implied ratings each performed differently over the last sixty days. The bond-implied rating is lower, the CDS-implied rating remained the same, and the EDF'-implied rating is better.FIGURE 1. JPMORGAN CHASE&CO.: MOODYS AND MARKET-IMPLIED RATINGS LAST 60 DAYS (DAILY DATA)The bond-implied rating fell by one notch from to A3 (Figure 1). On a few days in early June it dipped to Baa1. Bondholders may be concerned with a dip in the companys second quarter pre-tax margin and a rise in the commercial banks loan loss provisions. The CDS-impliedMOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 22 JULY 2015 MARKET SIGNALS REVIEW : JPM'S MARKET-IMPLIED RATINGS FOLLOW DIFFERENT PATHS OVER THE LAST TWO MONTHSrating is Baa1. It descended to Baa2 for a single day in early June. The EDF'-implied rating at A3 is better by one notch.Readers will recall that if an implied rating improves, the underlying securities have outperformed the broad market; when an implied rating worsens, 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 +1 notch (in this case a bond-impl...
