CORPORATESISSUER COMMENT 6 AUGUST 2015UNILEVER PLC (UL)Moodys Senior Unsecured Rating A1Moodys Outlook STABond-Implied Rating Aa2CDS-Implied Rating naEDF-Implied Rating AaaAs of 8/04/2015ANALYST 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 ReviewUnilevers Bond-Implied Rating Declines The bond-implied rating for Unilever worsened over the last 90 days by one notch, from Aa1 to Aa2. The EDF'-implied rating was unchanged at Aaa, where it has been since April 23, 2014.CDS-implied ratings are available only infrequently for Unilever. The companys CDS-implied rating was last reported as Aa1 on June 24. Due to illiquidity in Unilevers CDS contracts we do not view its CDS-implied rating as a reliable indicator of credit quality or relative value.FIGURE 1. UNILEVER: MOODYS AND MARKET-IMPLIED RATINGS, LAST 90 DAYS (DAILY DATA)According to our ratings gap-conditioned transition matrices, companies rated A1 with a bond-implied rating of Aa2 outperformed the broad market 13% of the time overMOODY'S ANALYTICS CORPORATES2 6 AUGUST 2015 MARKET SIGNALS REVIEW : UNILEVERS BOND-IMPLIED RATING DECLINESthe following 12 months, matched the markets performance 13% of the time, and underperformed the broad market 74% of the time.Readers will recall that when a market-implied rating falls the underlying securities have underperformed the broad market.Over the last three months, Unilevers bond-implied ratings gap narrowed (improved) from +3 notches to +2 notches (Figure 2). The EDF-implied ratings gap has remained at +4 notches since April, 2014.FIGURE 2. UNILEVER: MARKET-IMPLIED RATING GAPS, LAST 90 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES3 6 AUGUST 2015 MARKET SIGNALS REVIEW : UNILEVERS BOND-IMPLIED RATING DEC...
