Wednesday, June 2, 2010

Caterpillar (NYSE:CAT) Credit Outlook Raised by Moody's (NYSE:MCO)

Moody's (NYSE:MCO) raised the credit outlook for Caterpillar (NYSE:CAT) today, and the stock rose by almost 3 percent to close at $60.86.

The credit rating outlook includes Caterpillar, as well as the financing arm of the company, Caterpillar Financial Services Corp.

Caterpillar's investment grade "A2" rating was raised from "Negative" to "Stable" by Moody's, who themselves have been under fire lately for ratings they made for bonds which were backed by what became worthless mortgages.

Moody's reasoning was that Caterpillar has a much stronger business model after they restructured last year. Guidance from Caterpillar in their quarterly report was they were increasing production in response to increasing global demand.

I wonder if that optimism would be adhered to in light of the China inflation battle and sovereign debt crisis in Europe?

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