April 4 (Reuters) – General Electric Co shares
slipped 1.5 percent in premarket trading on Wednesday after
Moody’s Investors Service cut its rating on the largest U.S.
conglomerate and its finance arm by a notch, citing risk to GE
Capital’s funding model.
GE shares were down 30 cents at $19.66 in premarket trading,
off a $19.96 close on the New York Stock Exchange.
The ratings agency late on Tuesday lowered its rating on GE
to Aa3 from Aa2 and its rating on GE Capital to A1 from Aa2 and
maintained each entity’s short-term credit rating — key for
accessing the commercial paper market — at P-1. Both entities
remain solidly investment grade.
The Fairfield, Connecticut-based company once boasted a
top-shelf Aaa rating from Moody’s and Standard & Poor’s but was
stripped of that honor in 2009, during the financial crisis,
when investors feared trouble at GE Capital could undermine the
whole enterprise.
The company aims to resume its historic practice of paying a
dividend from GE Capital back to the parent company, but needs
the approval of its new regulator, the Federal Reserve, to do
so.
(Reporting By Scott Malone; Editing by Gerald E. McCormick)
