S&P Says it May Be Forced to Lower GE's Top Credit Rating in 2010
December 19, 2008
GE shares fell 8% to close at $15.96 on December 18, after Standard & Poor's analysts said they might be forced to downgrade GE's top credit rating by 2010 due to GE Capital's exposure to the global credit crisis.
A lower S&P rating would make it more difficult for the company to borrow money.
"We believe there is some risk that credit performance in 2009 could be significantly worse than management's forecast, given the potential for a sharp increase in losses at GE's commercial businesses, reflecting the economic downturn unfolding in a number of its key geographic markets and consumer segments," S&P said in a statement.
Manwhile, S&P reaffirmed GE's AAA long-term and A-1+ short term credit rating. GE is one of only a few non-financial firms to be so highly rated and has held the AAA distinction for more than 50 years.
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