Investment Fund Helmed by Carl Icahn Facing an S&P Cut to Junk

Shares of Icahn Enterprises, L.P. (IEP) plunged11% in afternoon trade Friday, after Standard & Poor’s warned it may place Carl Icahn’s investment holding firm to junk status because of significant declining investment values in the firm’s portfolio in the last few months. IEP has lost “at least $1.4 billion in value” since Sept. 30, the U.S. ratings agency said in a statement, adding that  heavy losses within the portfolio “have very likely led to the firm exceeding a 45 percent loan-to-value ratio”. The firm, in part, noted the significant deterioration in commodity-related stocks, including Chesapeake Energy Corporation (CHK), Cheniere Energy, Inc. (LNG), and Freeport-McMoRan Inc (FCX).

S&P’s placed its triple-B-minus issuer credit rating of Icahn’s investment vehicle on “CreditWatch with negative implications”. A downgrade of the credit rating would put the New York-based firm into junk territory.

Icahn Enterprises, L.P. shares have advanced 2.43% in the last 4 weeks, while declining 22.84% in the past three months. Over the past 5 trading sessions the stock has gained 22.71%.

IEP is down 40.22% year-over-year, compared with a 9.12% loss in the S&P 500.

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