General Electric Makes Tender Offers For $5B Debt Securities
Zacks Investment Research | Sep 13, 2019 08:56AM ET
General Electric Company (NYSE:GE) yesterday announced plans to reduce debts by $5 billion through tender offers to purchase the U.S. dollar and Euro-denominated debt securities. The tender offers are expected to expire on Oct 9, 2019.
The news came a day after General Electric announced plans for reduction of its stake in Baker Hughes, a GE company (NYSE:GE) by 20%. It intends on using the net proceeds of roughly $3 billion from the Baker Hughes transaction for lowering debts.
Inside the Headline
As noted, General Electric will spend approximately $2.5 billion each for purchasing the U.S. dollar and Euro-denominated debt securities. Principal amount of both types of securities is $1,000 or €1,000. Securities purchased by the company will be retired and cancelled.
Notably, the U.S. dollar denominated securities will include 4.500% of Notes due 2044, 4.125% of Notes due 2042, 3.375% of Notes due 2024 and 2.700% of Notes due 2022. Further, the Euro-denominated securities will include 2.125% of Notes due 2037, 1.875% of Notes due 2027, 1.500% of Notes due 2029, 1.250% of Notes due 2023, 0.875% of Notes due 2025 and 0.375% of Notes due 2022.
The move will enable General Electric to strengthen its balance sheet. The company targets to bring Industrial net debt/EBITDA ratio to less than 2.5 and GE Capital debt/equity ratio to less than 4.
As of June 30, 2019, General Electric’s Industrial borrowings stood at $31.8 billion, down from $32.3 billion recorded at the end of 2018. GE Capital’s borrowings was at $40 billion, down from $43 billion at 2018 end.
Zacks Rank, Share Price Performance and Earnings Estimates
General Electric currently has a market capitalization of $81.7 billion and a Zacks Rank #3 (Hold).
This company’s share price has gained 22.4% so far in 2019 compared with 19.8% growth recorded by the Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.