NEW YORK, March 2 (Reuters) - Sellers of credit insurance on General Electric Co’s (GE.N) finance arm were asking to be paid on an upfront basis on Monday, a sign of greater perceived risk after a rating agency threatened to cut its “triple-A” rating.
Five-year credit default swaps on General Electric Capital Corp were quoted around 8.5 percent upfront, meaning it would cost $850,000 in an upfront payment, plus $500,000 in annual payments to insure $10 million of GE Capital debt, according to data from Phoenix Partners Group. On Friday, it cost $710,000 a year to insure $10 million of debt.
Moody’s Investors Service on Friday said it may still cut GE’s “triple-A” rating after the conglomerate said it plans to reduce its dividend by 68 percent, saving about $9 billion a year. (Reporting by Dena Aubin, Editing by Chizu Nomiyama) (firstname.lastname@example.org; +1-646-223-6325; Reuters Messaging: email@example.com))