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General Electric Is Flashing Caution Signs in Credit Markets

  • CDS jump to more than 200 basis points, bonds trade like junk
  • Liquidity concerns ‘could be escalating,’ equity analyst says
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GE Shares Tumble as CEO's Reassurance Misses the Mark With Investors
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General Electric Co. may still have a relatively solid investment-grade rating, but investors aren’t taking their chances. They’re snapping up derivatives that protect against losses on the company’s debt.

The annual cost to insure against a default by GE for five years climbed above 200 basis points for the first time in years, credit-default swap prices from CMA show. That’s almost double what it cost just two weeks ago, and it’s the kind of level that hasn’t been seen for the company since the waning days of the global financial crisis.