From Research Recap:
After six hours and some 200 slides, analysts emerged slightly dizzy from GE Capital’s ”deep dive” into its finances, but still doubting the finance arm of General Electric (NYSE: GE) could deliver even on its worst-case scenario.
Headlines out of the analyst conference focused on how the company backed off its December projection of $5 billion in profits in 2009, with Nicole Parent of Credit Suisse Group commenting that it was still unclear whether GE could “earn its way through elevated losses” on its portfolio.
In a new report released this morning, CreditSights took issue with GE Capital’s use of tangible common equity to tangible asset ratio.
In our view, GECC cherry picked the capital ratio where it looked best, but senior creditors should account for all junior levels in the capital structure when assessing loss absorption cushion....MORE