FINANCIAL INSTITUTIONSISSUER COMMENT 6 MAY 2015OCWEN FINANCIAL CORP (OCN)Moodys Senior Unsecured Rating Caa1Moodys Outlook NEGBond-Implied Rating Caa1CDS-Implied Rating NAEDF-Implied Rating Caa3As of 05/05/2015ANALYST 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 ReviewOcwens Market-Implied Ratings Slip Lower The market-implied ratings for Ocwen weakened over the past year and equaled their worst levels of the last several years (Figures 1 and 2).FIGURE 1. OCWEN: MOODYS AND MARKET-IMPLIED RATINGS, LAST THREE YEARS (WEEKLY DATA)The bond-implied rating was B3 in May of 2014, and has deteriorated to Caa1 at present. Our bond-implied rating data for this company goes back only to May of 2014.The EDF'-implied rating was A2 in May of 2012, and then improved to Aaa on a few dates between September 2012 and March 2013. However, it has now deteriorated by an amazing eighteen notches from that plateau to Caa3. Ocwen's EDF-implied rating reached its all-time worst point of Ca between January and April of this year.MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 6 MAY 2015 MARKET SIGNALS REVIEW : OCWENS MARKET-IMPLIED RATINGS SLIP LOWERDue to illiquidity in its CDS contract we do not publish a CDS-implied rating for Ocwen.According to our ratings gap-conditioned transition matrices, companies rated Caa1 with a bond-implied rating of Baa2 outperformed the broad market 36% of the time over the following 12 months, matched the markets performance 23% of the time, and underperformed the broad market 31% of the time. Readers will recall that when a market-implied rating falls, the underlying securities have underperformed the broad market. 1FIGURE 2. OCWEN: MOODYS AND MARKET-IMPLIED RATINGS, LAST YEAR (DAILY DATA)MOODY'S ANALYTI...
