NEW YORK (Reuters) - Standard & Poor's stripped General Electric Co of its top-tier, triple-A credit rating, lowering its rating by one notch to AA-plus with a stable outlook, citing the credit profile of the GE Capital unit.
"The main factor in the downgrade was our assessment of the stand-alone credit profile of financial services unit GE Capital Corp," S&P said in a statement. "We believe that GECC is under increasing earnings pressure, due to recent sharp deterioration in general economic conditions around the globe.
"This will result, in our opinion, in rising credit losses across key segments of its finance portfolio. This is also causing weakening of the value of its real estate holdings and investment securities," S&P said.
S&P lowered its outlook on GE's ratings to "negative" in December. A month later, Moody's Investors Service took a stronger step, putting its ratings on review for possible downgrade.
Their stance was unchanged even after the company cut its dividend by 68 percent, in a move GE said would save $9 billion a year.
"It's good to see it not drop lower, and it's heartening to see that the outlook is stable. The ratings agencies can see more of that portfolio (than the average investor)," said Daniel Holland, equity analyst at Morningstar in Chicago. "Back in December when they flipped to negative, pandemonium broke loose, so it's good to see them to go stable."
GE, in a statement released just seconds after the downgrade, said it is one of the only financial services companies with a rating of AA-plus, and said it does not anticipate significant operational or funding impact from the change.
"We are prepared to run the company as a Double-A but will continue to run the company with the disciplines of a Triple-A company," Chief Executive Jeffrey Immelt said in a statement.
GE shares, part of the Dow Jones industrial average, were up 34 cents, or 4 percent, to $8.83 in early trading.
(Reporting by Nick Zieminski and Scott Malone, editing by Dave Zimmerman)
