CORPORATESISSUER COMMENT 11 NOVEMBER 2015WEYERHAEUSER COMPANY (WY)Moodys Senior Unsecured Rating Baa2Moodys Outlook STABond-Implied Rating Baa2CDS-Implied Rating A3EDF-Implied Rating Ba1As of 11/10/2015ANALYST 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 ReviewWeyerhaeuser Company: Market-Implied Ratings Converge The bond-, CDS-, and EDF'-implied ratings for Weyerhaeuser moved closer together from their largest differences over the last three months and are at the levels they were 90 days ago (Figure 1).The bond-implied rating is Baa2. It fell to Baa3 on multiple dates over the period. The companys CDS-implied rating is A3. It edged up to A2 on a few days over the last three months. Weyerhaeusers EDF-implied rating is Ba1. On several dates in early September it dipped to Ba2, but recovered to Ba1 as of September 16 and sustained that level since then.FIGURE 1. WEYERHAEUSER: MOODYS AND MARKET-IMPLIED RATINGS, 90 DAYS (DAILY DATA)MOODY'S ANALYTICS CORPORATES2 11 NOVEMBER 2015 MARKET SIGNALS REVIEW: WEYERHAEUSER COMPANY: MARKET-IMPLIED RATINGS CONVERGEAccording to our ratings gap-conditioned transition matrices, companies rated Ba2 with a bond-implied rating of Baa2 outperformed the broad market 34% of the time over the following 12 months, matched the markets performance 17% of the time, and underperformed the broad market 50% of the time.Readers will recall that when a market-implied rating falls, the underlying securities have underperformed the broad market.Weyerhaeusers bond-implied ratings gap is zero notches, identical to its level on August 11. It weakened to -1 notch on several days since then but recuperated. The CDS-implied ratings gap is +2 notches, the same as its level three months ago. While it ...
