CORPORATESISSUER COMMENT 14 JULY 2015REPUBLIC SERVICES, INC. (RSG)Moodys Senior Unsecured Rating Baa3Moodys Outlook RU STABond-Implied Rating Baa1CDS-Implied Rating Baa1EDF-Implied Rating AaaAs of 7/13/2015ANALYST 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 ReviewRepublic Services: Fixed Income Market-Implied Ratings Slip Slightly The current bond- and CDS-implied ratings for Republic Services are lower than their levels one year ago. They each declined from A3 to Baa1, but despite the dip maintain strong +2 notch market-implied ratings gaps.Republic Services bond-implied rating of Baa1 is its one-year low point. The CDS-implied rating moved to a one-year bottom of Baa2 in April but has recovered to Baa1. The companys EDF-implied rating has been Aaa every day over the past year.FIGURE 1. REPUBLIC SERVICES: MOODYS AND MARKET-IMPLIED RATINGS, LAST 365 DAYS (DAILY DATA)According to our ratings gap-conditioned transition matrices, companies rated Baa3 with a bond-implied rating of Baa1 outperformed the broad market 27% of the timeMOODY'S ANALYTICS CORPORATES2 14 JULY 2015 MARKET SIGNALS REVIEW : REPUBLIC SERVICES: FIXED INCOME MARKET-IMPLIED RATINGS SLIP SLIGHTLYover the following 12 months, matched the markets performance 13% of the time, and underperformed the broad market 60% of the time.Republic Services EDF-implied ratings gap was +9 notches a year ago, and has been steadfast at that level each day since then (Figure 2). The bond-implied ratings gap moved from +3 notches a year ago to +2 notches. The CDS-implied ratings gap was +3 notches and has shifted to +2 notches.Readers will recall that when a market-implied rating falls, as Republic Services CDS-, and bond-implied ratings both did over the last y...
