CORPORATESISSUER COMMENT 24 May 2016RATINGSWASTE MANAGEMENT , INC. (WM) Moodys SR Unsecured Rating Baa2Moodys Outlook STABond-Implied Rating A3CDS-Implied Rating A2EDF-Implied Rating [The Kraft Heinz Co. (KHC)]AaaAs of May 20, 2016ContactsXian Li 1.212.553.1404Senior Research Analyst xian.li@moodys.comAllerton 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 ReviewWaste Management: Two Market-Implied Ratings Up Over the Year The current bond- and CDS-implied ratings for Waste Management are better than their levels of one year ago.At that time the bond-implied rating for Waste Management was Baa1 (Figure 1). Since then it fluctuated between Baa1 and A2 and is at A3 now.The CDS-implied rating for Waste Management was Baa2 on May 26 last year. It improved to A3 in February 2016, dipped to Baa1 on March 15 for only one day, and recovered to its A2 current level.The EDF'-implied rating is Aaa, the same as last year and as high as it can go. WMs EDF measure of 0.01% is the best attainable.FIGURE 1. WASTE MANAGEMENT: MOODYS AND MARKET-IMPLIED RATINGS, LAST 365 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES2 24 May 2016 Market Signals Review: Waste Management: Two Market-Implied Ratings Up Over the YearThe bond-implied ratings gap for the company advanced from +1 notch a year ago to +2 notches now. The CDS-implied ratings gap improved from 0 to +3 notches. The EDF-implied ratings gap was unchanged at +8 notches over the past 365 days.Readers will recall that when a market-implied rating rises, the underlying securities have outperformed the broad market.1According to our ratings gap-conditioned transition matrices, companies rated Baa2 with a bond-implied rating of A3 outperformed the broad market 21% of the time over the following 12 mon...
