GE is on target to have reduced its debt burden by more than $75 billion over three years by the end of 2021 thanks to operational changes designed to boost cash flow and profit margins, the company said Tuesday.
The once-sprawling industrial conglomerate has been slashing its debt since Chief Executive Officer Larry Culp took the helm in 2018.
Credit default swaps tied to GE rallied to their best levels in more than three years Tuesday morning in New York, implying that investors see less risk for owning the company’s debt in the years ahead.
GE once ranked among the credit world’s elite issuers, holding triple-A ratings from 1956 until 2009 when the financial crisis and recession cast doubt on the stability of the conglomerate’s financial arm, GE Capital.
The breakup positions GE’s remaining aerospace unit to potentially reclaim an A level credit rating down the road with its more manageable balance sheet, Levington said.