FINANCIAL INSTITUTIONSISSUER COMMENT 13 NOVEMBER 2015STANDARD CHARTERED PLC (STANLN)Moodys Senior Unsecured Rating Aa3Moodys Outlook RURBond-Implied Rating A1CDS-Implied Rating Ba1EDF-Implied Rating Ba2As of 11/11/2015ANALYST 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 ReviewStandard Chartered PLC Market Signals All Down over the Year, One Up Recently Over the last 365 days, Standard Chartered PLC.s three market-implied ratings worsened. The bond-implied rating, the CDS-implied rating, and the EDF'-implied rating each slipped lower by one notch (Figure 1).The bond-implied rating fell from Aa3, the CDS-implied rating from Baa3, and the EDF'-implied rating from Ba1.FIGURE 1. STANDARD CHARTERED PLC: MOODYS AND MARKET-IMPLIED RATINGS LAST 365 DAYS (MONTHLY DATA)MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 13 NOVEMBER 2015 MARKET SIGNALS REVIEW: STANDARD CHARTERED PLC MARKET SIGNALS ALL DOWN OVER THE YEAR, ONE UP RECENTLYHowever, in a very recent time frame since the banks quarterly report on November 3 and Moodys ratings action (see text below) on November 9 the bond-implied rating moved up by one notch from A2 to A1, while the CDS-implied and EDF-implied ratings each fell by one notch, to Ba1 and Ba2, respectively.Readers will recall that when an implied rating worsens, the underlying securities have underperformed the broad market.Our ratings gap-conditioned transition matrices (available on Moodys CreditView) show that historically the bonds of a company rated Aa3 with a bond-implied ratings gap of -1 notch (in this case a bond-implied rating of A1) have outperformed the broad market 24% of the time in the following 12 months, matched the markets performance 9% of the time, and underperformed 68% of the...
