CORPORATESISSUER COMMENT 19 MAY 2015JETBLUE AIRWAYS CORP. (JBLU)Moodys Senior Unsecured Rating B3Moodys Outlook STABond-Implied Rating NACDS-Implied Rating B2EDF-Implied Rating Baa3As of 5/14/2015ANALYST 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 ReviewJetBlue: Market-Implied Ratings Take Off The CDS- and EDF'-implied ratings for JetBlue have both moved higher recently.The CDS-implied rating for JetBlue was B3 a year ago. In September of 2014 it began a gradual ascent to B2. Over the last eight months it fluctuated numerous times between B3 and B2, and once again has landed on B2 at present.JetBlues EDF-implied rating was B2 on May 15, 2014 (Figure 1). It has mostly cruised between Ba1 and Baa3 since then, and has now climbed to Baa3.Due to illiquidity of JetBlue bonds that are included in our bond-implied ratings model, we do not publish a bond-implied rating for JetBlue.FIGURE 1. JETBLUE: MOODYS AND MARKET-IMPLIED RATINGS, LAST 365 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES2 19 MAY 2015 MARKET SIGNALS REVIEW : JETBLUE: MARKET-IMPLIED RATINGS TAKE OFFAccording to our ratings gap-conditioned transition matrices, companies rated Baa2 with a bond-implied rating of Baa2 outperformed the broad market 33% of the time over the following 12 months, matched the markets performance 29% of the time, and underperformed the broad market 30% of the time.The EDF-implied ratings gap advanced a very strong seven notches from -1 notch a year ago to +6 notches now (Figure 2). The CDS-implied ratings gap improved from zero notches a year ago to +1 notch at present.Readers will recall that when a market-implied rating rises, as JetBlues have, the underlying securities have outperformed the broad market. 1FIGURE 2. JETBL...
