GE Statement on Moody’s Action
FAIRFIELD, CT . – Moody’s Investors Service today announced a downgrade of General Electric Company’s and General Electric Capital Corporation’s (GECC) long-term ratings from Aaa to Aa2, with a “stable” outlook. The ratings downgrade does not affect GE’s and GECC’s short-term funding ratings of Prime-1, which were affirmed by Moody’s. The action follows a thorough review of GE’s portfolio by Moody’s.
Moody’s defines obligations rated Aa (1-3) as judged to be of high quality and subject to very low credit risk. In its review, Moody’s highlighted that GECC has successfully strengthened its capital and liquidity to better protect its global businesses in this environment. Moody’s also pointed out that “GE’s industrial businesses will generate strong cash flows during the global economic downturn,” and it believes “that GE’s industrial operations continue to have strong Aaa characteristics, including a diversified portfolio of market-leading businesses that generate strong and durable profits and cash flow through cycles.”
Today’s action completes the ratings reviews by both Standard & Poor’s and Moody’s resulting in a “stable” outlook from both agencies. GE does not anticipate any significant operational or funding impacts from these ratings changes.
“This action was not unexpected in the current environment, and while no one likes a downgrade, Moody’s, like S&P, confirmed the fundamental soundness of GE Capital and the strength of our industrial businesses,” GE Chairman and CEO Jeff Immelt said.
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