FINANCIAL INSTITUTIONSISSUER COMMENT 27 OCTOBER 2015WELLS FARGO&COMPANY (WFC)Moodys Senior Unsecured Rating A2Moodys Outlook STABond-Implied Rating A1CDS-Implied Rating A3EDF-Implied Rating A3As of 10/26/2015ANALYST 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 ReviewWells Fargo&Companys Market Signals Are Steady Wells Fargos market-implied ratings did not change over the last 30 days.The bond-implied rating is A1 (Figure 1). Over the last year it varied between a high of Aa3 and a low of A3.FIGURE 1. WELLS FARGO: MOODYS AND MARKET-IMPLIED RATINGS LAST 30 DAYS (DAILY OBSERVATIONS)The EDF'-implied rating is A3. It currently stands just one notch below its A2 peak, which was achieved earlier in 2015 and is the best level reached by WFCs EDF-implied rating for last five years.MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 27 OCTOBER 2015 MARKET SIGNALS REVIEW: WELLS FARGO&COMPANYS MARKET SIGNALS ARE STEADYThe CDS-implied rating is A3 now, as it was a year ago. It rose briefly to A2 on a few occasions over the last year.Wells Fargos five-year CDS mid-spread of 53 bp compares to such peers JP Morgan Chase (76 bp), BankAmerica (77 bp), Morgan Stanley (76 bp), Citigroup (87 bp), and Goldman Sachs (88 bp).When a companys market-implied rating remains unchanged, the underlying securities have matched the performance of the broad market, if it falls, the underlying securities have underperformed the broad market, and when a market-implied rating rises the underlying securities have outperformed the broad market.According to our ratings gap-conditioned transition matrix, shown under the Market Signals tab on Moodys CreditView, a company rated A2 with a bond-implied rating of A1 outperformed the broad market 22%...
