October 7, 2015 / 9:25 PM / 2 years ago

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 (GE.N) 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.”

    Reporting by Lewis Krauskopf in New York

    0 : 0
    • narrow-browser-and-phone
    • medium-browser-and-portrait-tablet
    • landscape-tablet
    • medium-wide-browser
    • wide-browser-and-larger
    • medium-browser-and-landscape-tablet
    • medium-wide-browser-and-larger
    • above-phone
    • portrait-tablet-and-above
    • above-portrait-tablet
    • landscape-tablet-and-above
    • landscape-tablet-and-medium-wide-browser
    • portrait-tablet-and-below
    • landscape-tablet-and-below