FINANCIAL INSTITUTIONSISSUER COMMENT 9 June 2016RATINGSSOCIETE GENERALE (SOCGEN) Moodys SR Unsecured Rating A2Moodys Outlook STABond-Implied Rating Aa3CDS-Implied Rating Baa1EDF-Implied Rating Ba3As of June 7, 2016ContactsAllerton 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 ReviewSoci?t? G?n?rale : Market-Implied Ratings Above Year Lows Soci?t? G?n?rales three market-implied ratings improved from their low points of the last 12 months. The CDS-implied rating advanced by one notch. The bond- and EDF'-implied ratings match their observations of a year ago.The CDS-implied rating is Baa1. It dipped to Baa3 (worst of the year) on June 18, 2015, fluctuated between A3 and Baa2 since then, and settled at Baa1 a few months ago (Figure 1).The bond-implied rating is Aa3. Over the period it ranged from a high of Aa3 to a low of A2 on numerous occasions.The EDF'-implied rating remained at Ba3 over most of the last year. In mid-February and beginning of March 2016, it briefly deteriorated to its one-year lowest point of B2. It then moved up to Ba3, where it remains.FIGURE 1. SOCIT GNRALE: MOODYS AND MARKET-IMPLIED RATINGS - LAST 365 DAYS (DAILY DATA)MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 9 June 2016 Market Signals Review: Soci?t? G?n?rale : Market-Implied Ratings Above Year LowsReaders will recall that when an implied rating rises, the underlying securities have outperformed the broad market.Our ratings gap-conditioned transition matrices (available on Moodys CreditView) show that historically the bonds of a company rated A2 with a bond-implied ratings gap of +2 notches (in this case a bond-implied rating of Aa3) have outperformed the broad market 23% of the time in the following 12 months, matched the markets performance 18% of the t...
