FINANCIAL INSTITUTIONSISSUER COMMENT 20 JULY 2015U.S. BANCORP (USB)Moodys Senior Unsecured Rating A1Moodys Outlook STABond-Implied Rating A1CDS-Implied Rating Baa1EDF-Implied Rating A2As of 7/17/2015ANALYST 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 ReviewU.S. Bancorps CDS-Implied Rating Advances U.S. Bancorps CDS-implied rating improved from Baa2 90 days ago to Baa1 (Figure 1). The bond- and EDF'-implied ratings each match their levels three months ago. The A1 bond-implied rating briefly rose to a peak of Aa2 but was unable to sustain that advance. The EDF-implied rating has been A2.FIGURE 1. U.S. BANCORP MOODYS AND MARKET-IMPLIED RATINGS LAST 90 DAYS (DAILY OBSERVATIONS)Over the last three months, the CDS-implied ratings gap narrowed from -4 notches to -3 notches (Figure 2). The bond-implied ratings gap varied between +2 and zero notches. It stands at zero notches today matching its level on April 16. The EDF-implied ratings gap has been -1 notch for the last 3 months.MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 20 JULY 2015 MARKET SIGNALS REVIEW : U.S. BANCORPS CDS-IMPLIED RATING ADVANCESFIGURE 2. U.S. BANCORP MOODYS AND MARKET-IMPLIED RATINGS GAPS LAST 90 DAYS (DAILY OBSERVATIONS)EDF' credit measures observationsEDF-implied ratings are based on EDFTM metrics, which are derived from information about an entitys equity price and its capital structure. USBs one-year EDF metric of 0.14%, which maps to an EDF-implied rating of A2, is down (improved) by 25 bp from its high of 0.39% in August 2011, and better by 3 bp than the 0.17% of a year ago. In August 2011 USBs EDF-implied rating was Ba...
