Icahn Enterprises L.P.’s stock tumbled 5.9% in afternoon trade Friday, sharply extending losses after Standard & Poor’s placed the investment holding company’s credit rating on watch with negative implications. A downgrade of the credit rating, currently at BBB-, would put it into junk territory. The stock was down about 0.6% just before S&P’s announcement. “The CreditWatch action reflects declining investment values in the firm’s portfolio that we believe have very likely led to the firm exceeding a 45% loan-to-value (LTV) ratio, which we previously cited as a key threshold for the rating,” said S&P credit analyst Clayton Montgomery. Montgomery said he believes it’s possible that Chairman Carl Icahn, the company’s largest shareholder, could initiate an equity raise to support the capitalization, but that assumption isn’t included in the current rating or outlook. Icahn owns 117 million common shares of the company, or about 91% of the shares outstanding, according to FactSet. The stock has tumbled 47% over the last 12 months, while the S&P 500 has lost 8.7%.
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