CORPORATESISSUER COMMENT 19 OCTOBER 2015ORACLE CORPORATION (ORCL)Moodys Senior Unsecured Rating A1Moodys Outlook STABond-Implied Rating A1CDS-Implied Rating A1EDF-Implied Rating A1As of 10/14/2015ANALYST 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 ReviewOracle Corporation: Market-Implied Ratings Are Narrowly Range Bound The bond-, EDF'-, and CDS-implied ratings for Oracle fluctuated only slightly, between A1 and Aa3, over the last 90 days (Figure 1).The bond-implied rating was A1 three months ago. It rose to Aa3 on several occasions but was not able to sustain that advance, and is at A1 again today. Oracles EDF'-implied rating was A1 and, after several dates when it rose to Aa3, retraced to A1 again. The companys CDS-implied rating is A1, matching the level observed on July 14. It climbed to Aa3 from time to time since then, but has now settled at A1 once again.FIGURE 1. ORACLE: MOODYS AND MARKET-IMPLIED RATINGS, 90 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES2 19 OCTOBER 2015 MARKET SIGNALS REVIEW: ORACLE CORPORATION: MARKET-IMPLIED RATINGS ARE NARROWLY RANGE BOUNDAccording to our ratings gap-conditioned transition matrices, companies rated A1 with a bond-implied rating of A1 outperformed the broad market 24% of the time over the following 12 months, matched the markets performance 9% of the time, and underperformed the broad market 67% of the time.Readers will recall that when a market-implied rating rises the underlying securities have outperformed the broad market and when an implied-rating falls the underlying securities have underperformed the broad market.Oracles bond-, CDS-, and EDF-implied ratings gaps, all zero notches currently, improved at various points over the last 90 days but today match t...
