FINANCIAL INSTITUTIONSISSUER COMMENT 12 AUGUST 2015SUNTRUST BANKS, INC. (STI)Moodys Senior Unsecured Rating Baa1Moodys Outlook STABond-Implied Rating Baa2CDS-Implied Rating Baa1EDF-Implied Rating Baa1As of 8/11/2015ANALYST 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.This report has been republished on 1 July 2015 with the correction to Outlook in the ratings box from POS to STA.Market Signals ReviewSunTrust Banks: Market Signals Each Follow a Different Path The three market signals for SunTrust moved in different ways over the last 12 months. The bond-implied rating is worse, the CDS-implied rating is the same as the level one year ago, and the EDF'-implied rating improved.The bond-implied rating for STI fluctuated between a high point of A3 and a low point of Baa2. The current bond-implied rating of Baa2 is two notches lower than the level observed a year ago (Figure 1). SunTrusts EDF-implied rating advanced from Baa2 on August 11, 2014 to an investment grade Baa1. The EDF-implied rating for STI has rebounded by eight notches from B3 in December 2011.FIGURE 1. SUNTRUST: MOODYS AND MARKET-IMPLIED RATINGS LAST 12 MONTHS (DAILY DATA)MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 12 AUGUST 2015 MARKET SIGNALS REVIEW : SUNTRUST BANKS: MARKET SIGNALS EACH FOLLOW A DIFFERENT PATHReaders should note that STI does not have liquid CDS, so we do not publish a CDS-implied rating for the company every single day, though from time to time our model will generate a CDS-implied rating. Accordingly, we rely less on this market signal as an indication of STI credit risk. Recently the CDS-implied rating varied between Baa1 (its present level) and Baa2.The bond-implied ratings gap is currently -1 notch, versus +1 notch a year ago (Figure 2). The...
