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GE Money shrugs off parent company's downgrade


GE Money, the New Zealand consumer finance company ultimately owned by General Electric, has shrugged off its parent's credit rating downgrade, saying it doesn't expect much impact on funding costs.

Hannah Lynch
Thu, 05 Apr 2012

BUSINESSDESK: GE Money, the New Zealand consumer finance company ultimately owned by General Electric, has shrugged off its parent’s credit rating downgrade saying it doesn’t expect much impact on funding costs.

Moody's Investors Service downgraded the credit rating of GE’s American parent, General Electric, to Aa3 from Aa2 this week.

The agency also lowered GE Capital's rating by two notches to Aa2.

GE Money offers consumer credit, personal loans, promotional retail finance and insurance in New Zealand.

“This does not affect the short term rating of P-1 [highest rating] and should not materially affect cost of funds or long-term funding plans,” a Sydney-based spokeswoman for GE Money told BusinessDesk.

“With $80 billion in cash and a healthy balance sheet we are well positioned.

“The April 3 action by Moody’s has nothing to do with our credit position, but is rather a change in their methodology,” the company said.

Russell Solomon, senior vice-president at Moody’s said: “The downgrade reflects Moody’s view of the heightened risk profile inherent to finance companies like General Electric Capital Corporation, which has strategic importance to GE, rather than any deemed incremental risk related to GE’s industrial business lines,”

Locally, the company has assets of about $NZ1.4 billion, while the global parent has assets of about $US184 billion, according to its website.

In December, GE made a $60,000 donation to the New Zealand Federation of family Budgeting Services after admitting to a breach of the Fair Trading Act.

The Commerce Commission found GE’s direct mail, print and radio advertising campaign inviting consumers to consolidate their loans to be repaid over a longer period of time made false representations.

Hannah Lynch
Thu, 05 Apr 2012
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GE Money shrugs off parent company's downgrade
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