S&P puts GE on watch

S&P said it placed its General Electric Co. ratings on Credit Watch with negative implications.

The CreditWatch placement follows GE's announcement it will combine its Gecas assets with AerCap Holdings NV in a transaction valued at more than $30 billion. “Under the terms of the transaction, we expect GE to receive $24 billion in cash, $1 billion in notes or cash and a $6 billion equity interest in the combined entity (46% of the combined Gecas-AerCap common equity). We expect GE will use all of the cash proceeds to reduce debt,” S&P said in a press release.

The agency said it sees GE’s leverage will be higher than previously forecasted due to the consolidation of GE Capital financials.

S&P said it aims to resolve the CreditWatch within 10 to 12 months and sees trimming GE’s issuer rating a notch to BBB.

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