CORPORATESISSUER COMMENT 21 OCTOBER 2015JOY GLOBAL INC. (JOY)Moodys Senior Unsecured Rating Baa3Moodys Outlook NEGBond-Implied Rating B1CDS-Implied Rating NAEDF-Implied Rating B3As of 10/20/2015ANALYST 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.Market Signals ReviewJoy Global Inc.: Two Market-Implied Ratings Sink The bond- and EDF'-implied ratings for Joy Global were down over the last three months and now match their five-year low points.Over the past 90 days the companys bond-implied rating worsened by a notch to its current level of B1 (Figure 1). The EDF'-implied rating dropped by a notch to B3.Due to illiquidity in the companys CDF contracts we do not publish a CDS-implied rating for Joy Global.FIGURE 1. JOY GLOBAL: MOODYS AND MARKET-IMPLIED RATINGS, 90 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES2 21 OCTOBER 2015 MARKET SIGNALS REVIEW: JOY GLOBAL INC.: TWO MARKET-IMPLIED RATINGS SINKAccording to our ratings gap-conditioned transition matrices, companies rated Baa3 with a bond-implied rating of B1 outperformed the broad market 36% of the time over the following 12 months, matched the markets performance 6% 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. 1Joy Globals bond-implied ratings gap deteriorated over the last three months. The bond-implied ratings gap widened from -1 notch to -4 notches (Figure 2). The EDF-implied ratings gap is now -6 notches. It moved to -7 notches for multiple days over the last three months but recovered to -6 notches following Moodys downgrade of the companys senior debt from Baa2 to Baa3 on October 19.FIGURE 2. JOY GLOBAL: MARKET-IMPLIED RAT...
