7:34 a.m. March 10, 2021
- By Tomi Kilgore
GE credit rating on track to be downgraded at S&P Global after GECAS dealGeneral Electric Co.'s credit rating is headed toward a downgrade at S&P Global Ratings, which said to combine its aircraft leasing business, GE Capital Aviation Services (GECAS), with AerCap Holdings NV increase GE's debt leverage more than previously expected. S&P said it placed GE's BBB+ rating on CreditWatch with negative implications, and expects a one-notch downgrade to BBB, which is two notches above "junk" status, in about 10 to 12 months. The GECAS deal is valued at more than $30 billion for GE, with proceeds expected to be used to reduce debt. However, the remaining assets of GE Capital, which S&P Global had previously treated as a captive finance unit, will be incorporated into GE, and is expected to increase GE's debt leverage to about 6.0X. Meanwhile, fellow credit rating agency Moody's Investors Service affirmed GE's Baa1 credit rating, which is three notches above "junk," and affirmed the negative outlook, while Fitch Ratings affirmed the BBB rating -- 2 notches above "junk" -- and stable outlook. GE's stock, which fell 5.7% in midday trading, has gained 16.6% over the past three months, while the S&P 500 has advanced 6.4%.
12:50 a.m. Nov. 9, 2020
- By Steve Goldstein
Fitch lowers Saudi Arabia outlook to negativeFitch Ratings on Monday lowered its long-term foreign-currency issuer default rating on Saudi Arabia to negative from stable while affirming the rating at A. Fitch cited the continued weakening of its fiscal and external balance sheets, which has been accelerated by the coronavirus pandemic and lower oil prices . Fitch expects the Saudi government budget deficit to widen to 12.8% of GDP in 2020 from 4.5% of GDP in 2019, due to a 33% drop in oil revenue, a 5% drop in non-oil revenue and 1% higher spending.
2:37 p.m. July 31, 2020
- By Rachel Koning Beals
Fitch cuts U.S. credit outlook to 'negative' on COVID-19, election uncertainty, but maintains AAA ratingFitch Ratings on Friday turned more negative on the outlook for the gold-plated U.S. credit rating. High fiscal deficits and debt were already on a rising medium-term path before the onset of the huge economic shock precipitated by the coronavirus, the ratings agency said in giving the U.S. a "negative" outlook, while maintaining a AAA rating. The U.S. had the highest government debt of any AAA-rated sovereign heading into the crisis, and Fitch expects general government debt to exceed 130% of GDP by 2021. The U.S. sovereign rating is supported by structural strengths that include the size of the economy, high per capita income and a dynamic business environment. Fitch considers U.S. debt tolerance to be higher than that of other 'AAA' sovereigns. Fitch said it expects negative real interest rates and continued loose monetary policy at the Federal Reserve to provide some support to public debt dynamics. The report also looked ahead to the November election. "The odds of Democrats overturning the Republican majority in the Senate have shifted in their favor over the past quarter, but it is unlikely that either party will achieve a 60-seat majority," Fitch analysts wrote. "A continuation of policy gridlock is a risk. Political polarization may weaken institutions and reduces the scope for bipartisan cooperation, hindering attempts to address structural issues (including some highlighted by the pandemic and protests) but also longer-term fiscal challenges."
10:51 a.m. July 25, 2020
- By Keith Jurow
The feared jumbo mortgage debacle is here — thanks to the coronavirus — and ready to pound the housing market COVID-19 pandemic is squeezing borrowers’ ability to stay in their homesCOVID-19 pandemic is squeezing borrowers’ ability to stay in their homes, writes Keith Jurow.
10:05 a.m. June 24, 2020
- By Andrea Riquier
Canadian ETFs lose ground as Fitch cuts sovereign ratingExchange-traded funds made up of Canadian securities slumped Wednesday in the wake of a sovereign debt downgrade. Fitch Ratings on Wednesday cut the country's rating to AA+ from AAA, citing "deterioration of Canada's public finances in 2020 resulting from the coronavirus pandemic." The ratings agency noted that Canada will run a much larger general government deficit in 2020 and emerge from recession with much higher public debt ratios. The iShares MSCI Canada ETF was 2.2% lower in the early afternoon, as was the JPMorgan BetaBuilders Canada ETF .
3:28 a.m. May 12, 2020
- By Tanner Brown
China shares stagnant this week despite Beijing hints at ‘more powerful’ stimulus PBOC’s quarterly report marks shift in tone from conservative to more flexible tools to fight slowdownThe PBOC’s quarterly report marks shift in tone from conservative to more flexible tools to fight slowdown
2:51 a.m. May 7, 2020
- By Ciara Linnane
Fitch downgrades General Motors rating to one notch above junk Fitch Ratings downgraded General Motors Co.'s long-term issuer default rating to BBB-minus from BBB, putting it one notch above junk status. The rating agency also downgraded GM Financial's IDR to BBB-minus, and said both ratings outlooks are stable. The move is based on the expectation that the auto giant's credit profile will remain weak for a prolonged period, against the macroeconomic environment caused by the coronavirus pandemic. "Fitch expects the macro environment to remain weak through the rest of 2020 and much of 2021, which will likely keep sales volumes well below the 2019 level into much of 2022," the agency said in a statement. "The company's more concentrated operations, with its automotive FCF completely dependent on the North American and Chinese auto markets, could also pose some risk in the future, although it has resulted in less cash burn in the current environment." GM's ratings and stable outlook reflect the company's strong liquidity position and the expectation that it will retain and investment-grade rating once the peak of the pandemic has passed. GM shares were up 1.8% premarket, but have fallen 40% in the year to date, while the S&P 500 has fallen 12%.
4:21 a.m. May 5, 2020
- By Andrea Riquier
A new asset class joins the ETF world: sukuk A little more yield, a little more risk? A new ETF is the first to offer access to sukuk, Islamic finance-compliant instruments similar to lease agreements.
5:15 a.m. May 4, 2020
- By Tomi Kilgore
Starbucks credit downgraded to 2 notches above 'junk' at Fitch, outlook is negativeStarbucks Corp.'s credit rating was downgraded to BBB from BBB+ at Fitch Ratings, citing the coffee seller's high debt leverage amid a "significant business interruption" from the coronavirus pandemic. Fitch said the rating outlook is negative, which warns of further downgrades. Starbucks's credit rating is now two notches above "junk" territory at Fitch. The credit rating agency said the downgrade follows Starbucks's proposed $3 billion debt offering and disappointing . Fitch said the negative outlook reflects the downturn on discretionary spending caused by the coronavirus pandemic, which Fitch expects "could extend well into 2021." The stock, which fell 1.2% in premarket trading, has lost 16.5% over the past three months through Friday, while the S&P 500 has shed 14.2%.
2:59 a.m. April 30, 2020
- By William Watts
ECB’s emergency response to coronavirus economic crunch applauded — but more help likely to be needed ECB may stand pat Thursday, but more action expected in near futureTo European Central Bank President Christine Lagarde’s relief — actions did speak louder than words. The question for investors is whether more action is in store this week.