April 4 General Electric Co (GE.N) shares slipped 1.5 percent in premarket trading on Wednesday after Moody's Investors Service cut its rating on the largest U.S. conglomerate and its finance arm by a notch, citing risk to GE Capital's funding model.
GE shares were down 30 cents at $19.66 in premarket trading, off a $19.96 close on the New York Stock Exchange.
The ratings agency late on Tuesday lowered its rating on GE to Aa3 from Aa2 and its rating on GE Capital to A1 from Aa2 and maintained each entity's short-term credit rating -- key for accessing the commercial paper market -- at P-1. Both entities remain solidly investment grade. [ID:nL3E8F39YS]
The Fairfield, Connecticut-based company once boasted a top-shelf Aaa rating from Moody's and Standard & Poor's but was stripped of that honor in 2009, during the financial crisis, when investors feared trouble at GE Capital could undermine the whole enterprise.
The company aims to resume its historic practice of paying a dividend from GE Capital back to the parent company, but needs the approval of its new regulator, the Federal Reserve, to do so.
(Reporting By Scott Malone; Editing by Gerald E. McCormick)
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