S&P revises GE credit outlook to negative after Peltz buys in
Reuters
Published Oct 07, 2015 05:28PM ET
Updated Oct 07, 2015 05:39PM ET
S&P revises GE credit outlook to negative after Peltz buys in
(Reuters) - Standard & Poor's said on Wednesday it was more likely than before to cut General Electric Co's (N:GE) credit rating in the next two years after activist investor Nelson Peltz's purchase of a $2.5 billion stake in the company.
Peltz's Trian Fund Management, which unveiled its roughly 1 percent stake in GE on Monday, urged GE to explore more share buybacks including by taking on new debt.
S&P said in a report that Trian was advocating share buybacks "beyond our current expectations." Trian's move comes after GE management had already made statements that suggest it could adopt a less conservative financial policy, S&P said.
S&P revised its outlook on GE's credit rating to "negative" from "stable," meaning S&P may downgrade the credit rating in the next two years. S&P also affirmed its "AA+" corporate credit rating on GE.
"The negative outlook reflects our expectation that the company could potentially adopt a less conservative financial policy than we currently expect," S&P said in the report, adding that GE could eventually pursue buybacks "to an extent that significantly increases its leverage."
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.