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General Electric Falls 3% Despite Analyst Claiming Debt Fears Overblown

Published 11/26/2018, 12:38 PM
Updated 11/26/2018, 01:45 PM
© Reuters. - Shares of General Electric (NYSE:GE) fell Monday as concerns about the conglomerate's massive debt pile continued to weigh, despite an analyst claiming investor concerns were overblown.

GE's $115 billion debt pile has left investors fearing that the company could see its credit status reduced to junk, which would likely rack up the amount it pays to service its debt at time when the company is struggling to alleviate investor concerns about future profitability.

General Electric CEO Larry Culp told CNBC in an interview early November, that he would sell assets to cut the company's debt and touted the possible IPO of the company's health care business.

But not everyone is convinced the company is heading for junk status. Peter Tchir of Academy Securities said Wall Street's fears about General Electric's bonds are overblown.

Despite spread widening in the secondary markets because of its debt profile, General Electric "should not see a material increase in their total cost of borrowing in 2019," Tchir said in a note, citing $26 billion of the company's $105 billion of debt is maturing in the next two years, mostly in 2020.

General Electric was down by 3.17% to trade at $7.33 by 12:37 (17:37 GMT) on Monday on the NYSE exchange.

The volume of General Electric shares traded since the start of the session was 69.51 million. General Electric has traded in a range of $7.32 to $7.74 on the day.

The stock has traded at $8.60 at its highest and $7.32 at its lowest during the past seven days.

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