NEW YORK, March 2 (Reuters) - Sellers of credit insurance on General Electric Co's 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)
(dena.aubin@thomsonreuters.com; +1-646-223-6325; Reuters Messaging: dena.aubin.reuters.com@reuters.net)) Keywords: GECAPITAL CDS/PHOENIX
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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)
(dena.aubin@thomsonreuters.com; +1-646-223-6325; Reuters Messaging: dena.aubin.reuters.com@reuters.net)) Keywords: GECAPITAL CDS/PHOENIX
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.