GE Capital Seeks to Buy Back $1.45 Billion of Debt

Discussion in 'Stocks' started by ASusilovic, Mar 7, 2009.

  1. March 6 (Bloomberg) -- General Electric Capital Corp. is offering to buy back about $1.45 billion of debt as it tries to amend terms of the bonds.

    The financing arm of General Electric Co. is asking bondholders to amend a covenant in the securities that limits the unit’s ability to pledge property or assets to secure debt without having to also secure the notes, the unit said in a prospectus dated yesterday. Details of the prospectus, obtained by Bloomberg News, were confirmed by Citigroup Inc., which is handling the proposed buyback.

    The amendment will “provide the company with broader financing capability,” GE Capital said.

    GE Capital, based in Stamford, Connecticut, plans to repurchase fixed- and floating-rate debt in 29 issues ranging from $10,000 to $450 million outstanding, according to the prospectus.

    GE Capital will pay 100 cents to 112 cents on the dollar to bondholders who tender by March 24. Holders who tender by April 8 would receive 99 cents to 111 cents on the dollar, according to the prospectus.

    Shares of the parent company this week dropped below $6 for the first time since December 1991 on concern that GE Capital may require additional cash. GE Chief Financial Officer Keith Sherin said in a statement yesterday that he sees no need to raise additional capital, and that the company’s financial services businesses expect to be profitable in the current quarter and year.

    ‘Strong Liquidity’

    GE Capital “has strong liquidity for 2009, largely because of its access to government programs,” Barclays Capital analysts led by Jonathan Glionna in New York said yesterday in a report. “Until the secured and unsecured debt markets recover, wholesale funded institutions will remain largely dependent on government programs for funding, in our opinion.”

    The tender offer is designed to remove the covenants and give the company more flexibility, said Russell Wilkerson, spokesman for General Electric. The amount of the debt had reached a small enough amount that “it was the time to do it,” he said. GE doesn’t have current plans to pursue financing that would require the covenants be removed, he said.

    GE 7.06. + 6,01%
  2. Instead of playing money games they should release the amount of worthless assets they are holding off balance sheet.
  3. This is a decent start I guess. Everyone's still hoping this garbage comes up with some reasonable bid. hah.....what are they doing holding this crap if they don't understand "loss cutting"
  4. How about they fire all their worthless employees?

    Like the ones that got them into this mess.

    And the pricks that think a financial channel needs asinine sound effects every 5 seconds.

    Bad decision making everywhere at GE.