CORPORATESISSUER COMMENT 9 JULY 2015SONY CORPORATION (SNE)Moodys Senior Unsecured Rating Ba1Moodys Outlook RU POSBond-Implied Rating Aa3CDS-Implied Rating A3EDF-Implied Rating Baa2As of 7/7/2015ANALYST 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 ReviewSony Corporation: All Market-Implied Ratings Advance The current bond-, CDS-, and EDF'-implied ratings for Sony are all higher than their levels one year ago. The bond- and CDS-implied ratings are at their best levels observed over the last year.A year ago Sonys bond-implied rating was A1 (Figure 1). Since then it has moved from its one-year low point of Baa1 in mid-December to Aa3, where it is now. The CDS-implied rating was Ba2 and has now reached its highest point of the year at A3. Sonys EDF-implied rating was B1. It has followed a mostly improving trend and reached a pinnacle of A3 in late June. Unable to sustain that advance, it has since dipped back to Baa2, which is five notches better than the level a year ago.FIGURE 1. SONY: MOODYS AND MARKET-IMPLIED RATINGS, LAST 365 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES2 9 JULY 2015 MARKET SIGNALS REVIEW : SONY CORPORATION: ALL MARKET-IMPLIED RATINGS ADVANCEAccording to our ratings gap-conditioned transition matrices, companies rated Ba1 with a bond-implied rating of Aa3 outperformed the broad market 46% of the time over the following 12 months, matched the markets performance 6% of the time, and underperformed the broad market 47% of the time.Sonys EDF-implied ratings gap was -3 notches one year ago. It moved up to +4 notches briefly before retreating to -2 notches at present.(Figure 2). The bond-implied ratings gap moved from +6 notches a year ago to +7 notches. The CDS-implied ratings gap was -3 notches ...
