MOODY'S CONFIRMS GENERAL ELECTRIC COMPANY'S RATINGS (SENIOR AT Aaa)
New York, 12/19/1996 -- Moody's Investors Service confirmed General Electric Company's (GE) debt ratings following its announcement that it plans to increase its share repurchase program to $13 billion from $9 billion. Since the program's inception, GE has purchased approximately $6.3 billion of its common stock. The new program, which has been extended by one year through 1998, would thus allow the company to repurchase between $3.0-$3.5 billion in each of the next two years. Concurrent with the share repurchase announcement, GE also increased its dividend by thirteen percent. The rating confirmation is based on the company's strong business portfolio, solid and consistent cash flow generation, and management's track record of financial prudence.
Ratings confirmed include: General Electric Company: $4.4 billion of senior long term debt at Aaa General Electric Company: $3.4 billion of short term debt at Prime-1
Moody's said the increased authorization for the next two years approximates, on an annual basis, a similar value of common shares repurchased in 1995 and 1996. The rating agency went on to say that it expects a continuation of strong cash flows during 1997 in an environment where there is likely to be fewer attractive opportunities for major acquisitions for the group. To the extent that its business opportunities or cash flow position changes, Moody's expect that GE's share repurchase program would be adjusted in order to maintain a prudent financial structure and excellent debt protection measures.
General Electric Company, headquartered in Fairfield, Connecticut, is one of the largest diversified companies in the world with consolidated revenues of $70 billion in 1995.
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