Barely 24 hours after Culp became CEO
, S&P World Rankings downgraded the credit score rankings of GE (GE
) and GE Capital. Moody’s and Fitch warned they might do the identical.
All three rankings companies cited GE’s elevated leverage and shrinking money flows — an alarming pattern exacerbated by critical issues at GE’s energy division. GE mentioned on Monday that plunging profit at GE Power
will trigger the mum or dad firm to overlook targets in 2018.
Through the years, GE has piled on tons of debt brought on by poorly-timed deals
, a large pension deficit
and misguided share buybacks.
Underscoring the size of the issue, Moody’s mentioned that GE’s “very elevated leverage” may lead it to downgrade the corporate’s ranking by a number of notches. Rankings downgrades could make it costlier for corporations to borrow cash.
The excellent news is that S&P up to date its outlook on GE to “steady” as a result of the agency expects leverage and money movement will enhance within the coming years.
Nonetheless, GE’s debt issues could drive the corporate to reexamine its…