Tuesday, January 27, 2009

Breaking News: GE Capital Corp May Be Cut By Moody's, AAA Rating on Downgrade Review

Uh Oh... Splinters forming among the rating agency community (link)


GE immediately issues following statement (no, they definitely did not see this coming)

Statement from GE Regarding Moody’s Review

Business Wire

FAIRFIELD, Conn. -- January 27, 2009

Moody’s informed us today it has placed General Electric Company's and General Electric Capital Corporation's (GECC) long-term Aaa ratings on review for possible downgrade. This review does not affect GE’s and GECC’s short-term funding ratings of Prime-1 (P-1), which were affirmed by Moody's. This action is a follow-up to Moody’s December review of GE’s 2009 operating plan. GE has outlined a plan for the year that is based on the difficult global economic environment we see. During the next few months, we will work constructively with Moody’s on its review. Our objective is to maintain our Triple-A rating but we do not anticipate any major operational impacts should that change. We expect to deliver on the 2009 financial framework that we outlined last week.

GE has taken steps to strengthen its liquidity position, including reducing GE Capital Services' commercial paper from $88 billion in 3Q ’08 to $65 billion today. We have raised 64% of our long-term funding for 2009. The company has more than $50 billion in cash on hand. During 2008, GE increased its alternative funding by $25 billion and will continue to grow this funding in 2009 and beyond. Sphere: Related Content
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Maggie Knowles said...

And Moody's is credible because???...