GE Gives Moody’s The Finger
GE Capital, the financial services arm of General Electric NYSE:GE), provided a fitting response to Moody’s April downgrade by resuming its dividends to parent GE, declaring a quarterly $475 million dividend and a special payout of $4.5 billion.
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“GE Capital will return cash to GE beginning this quarter,” General Electric CEO Jeff Immelt said in a statement. “This action demonstrates the strength of GE Capital and the significant actions taken to strengthen its liquidity, capital, asset quality and profitability.”
The quarterly dividend will be payable to GE in the second quarter and the special dividend later this year, with both subject to approval by the Fed, its regulator as of 2011.
The cash from GE Capital should be a shot in the arm for its parent, as it tries to improve its own dividend payouts and repay shareholders for the $12 billion stock sale it made in October 2008.
GE Capital received help from its parent by way of better liquidity and capital levels but had to rein in its business considering the turmoil in the financial services markets.
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