So maybe we have a happy heart? The many owners of GE Capital Canada's $12.9-billion of debt can take some comfort from the latest sentiment on the suddenly humbled industrial giant.GE Capital debt, a core holding in many bond funds, has been pounded by an onslaught of concerns over the unit's solvency, and its future. The price of these bonds was in free fall on speculation triple-A rated GE Capital will be downgraded on mounting losses.
GE took steps Thursday to clear the air. CFO Keith Sherin calmed investors by saying there was no “time bomb” hidden at its GE Capital finance unit, making reference to a negative Wall Street Journal report on Wednesday that spooked investors, TD Waterhouse noted Friday in a report. In a forecast that's not lacking in courage, Mr. Sherin projected: “If you look through a three-year period, we're basically going to deal with about $35-billion in losses and impairments while being profitable in GE Capital.”
That prompted an upbeat response from research firm Gimme Credit analyst Kathleen Shanley, who wrote late Thursday: “While we wish the rating agencies would hurry up and strip GE of the triple 'A' so we could all stop talking about it, we continue to view the consolidated firm as a top-tier credit.'
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