CORPORATESISSUER COMMENT 14 MAY 2015MONSANTO COMPANY (MON)Moodys Senior Unsecured Rating A3Moodys Outlook NEGBond-Implied Rating A3CDS-Implied Rating A2EDF-Implied Rating AaaAs of 05/13/2015ANALYST 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 ReviewMonsantos Fixed Income Market-Implied Ratings Slip Lower The fixed income oriented market-implied ratings for Monsanto weakened over the past year (Figure 1).FIGURE 1. MONSANTO: MOODYS AND MARKET-IMPLIED RATINGS, LAST YEAR (WEEKLY DATA)The bond-implied rating was Aa3 one year ago and has deteriorated to A3 at present, its worst level of the last five years (Figure 2). This low point was reached on multiple occasions, most recently in April of 2011. The bond-implied rating attained the Aaa level once briefly three years ago, but has slumped six notches from that apex.The CDS-implied rating is down five notches from Aaa in September 2011 to A2. It was Aa2 one year ago and has now receded to match its lowest point since December of 2010.MOODY'S ANALYTICS CORPORATES2 14 MAY 2015 MARKET SIGNALS REVIEW : MONSANTOS FIXED INCOME MARKET-IMPLIED RATINGS SLIP LOWERThe EDF'-implied rating was Aa1 a year ago, and then improved to Aaa on May 23, where it has remained ever since. The EDF-implied rating was Baa2 five years ago (Figure 1), and stands eight notches higher today.FIGURE 2. MONSANTO: MOODYS AND MARKET-IMPLIED RATINGS, LAST YEAR (WEEKLY DATA)According to our ratings gap-conditioned transition matrices, companies rated A3 with a bond-implied rating of A3 outperformed the broad market 34% of the time over the following 12 months, matched the markets performance 25% of the time, and underperformed the broad market 40% of the time.Readers will recall that when a market-...
