Whew, it's just a negative outlook AND a downgrade. Dodged that bullet. So if Citi and JP and BofA are going to turn a profit, will they take US taxpayer money and provide it as bonuses, dividends and fun trips to Vegas?
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"General Electric Co. shares and bonds rallied after Standard & Poor’s lowered its debt ratings one level and raised the outlook to “stable,” comforting investors concerned about a possible sharper cut.
The switch to AA+, from AAA and with a “negative” outlook, affects long-term debt, S&P analysts said in a statement today.
GE, which held the top rating since 1956, said in a statement it doesn’t foresee “any significant operational or funding impacts.” The Fairfield, Connecticut-based company’s shares rose $1.08, or 13 percent, to $9.57 at 4 p.m. in New York Stock Exchange composite trading.
“A one-notch downgrade and ‘stable’ mean you can take away the ratings as an issue for the time being,” said Stephen Tusa, a JPMorgan Chase & Co. analyst in New York. If S&P had kept the negative outlook, “it would have lingered as an issue.”
The global recession and credit crunch have hurt profit at GE and its finance arm, raising investors’ concern that the parent would have to seek more outside funding to support GE Capital.
Chief Executive Officer Jeffrey Immelt until January was saying that GE generates enough earnings to justify keeping both its annual dividend and the AAA, an endorsement that a company is among a handful of the world’s safest and strongest. On Feb. 27 he reduced the shareholder payout for the first time since 1938 in a move to save about $9 billion a year...."
bloomberg |
