Today's Standard & Poors loooooong anticipated downgrade announcement of General Electric's credit rating from AAA to AA+ (the next level down) most likely portends that Moody's Corp (MCO) will be quickly following suit with its own credit ratings downgrade of GE. If Moody's indeed decides to downgrade GE then there will only be 4 companies operating in the S+P 500 UNIVERSE today commanding Moody's HIGHEST Level Credit Rating of AAA:
* Automatic Data Processing (ADP) - a $18 Billion marketcap financial firm
* Berkshire Hathaway (BRKA) - a $130 Billion mcap insurance conglomerate
* Exxon Mobil (XOM) - a $330 Billion mcap oil and gas company
* Microsoft (MSFT) - a $150 Billion mcap technology company
* TIAA-CREF (private...not in the S+P 500) - a not-for-profit retirement organization for 3 million people
FYI, A triple A credit rating is desirable as it essentially allows companies to borrow money at the cheapest interest rates possible (allowing said company to maximize potential returns from that borrowed money). General Electric held Standard & Poor's AAA credit rating since 1956. Per its most recent annual company filings with the SEC, and under the terms of its existing debt instrument guarantees and covenants, GE would have to post additional collateral on its long term debt if its credit ratings were to be cut four more levels to below AA-/Aa3.
bloomberg.com/apps/news?pid=20601087&sid
Data Courtesy: Bloomberg
Full Disclosure: I own shares of GE.
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