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General Electric (GE) Announces Tender Offers for Multiple Notes

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General Electric Company (GE - Free Report) yesterday announced its plans to lower its debt position through tender offers to purchase the U.S. dollar-denominated notes. The tender offers are expected to expire on Jun 21, 2021.

It is worth noting here that the company’s shares have declined 0.4% yesterday, ending the trading session at $13.18.

Inside the Headlines

As noted, the company’s tender offer is applicable for three sets of securities that have been either issued by the company or General Electric Capital Corporation (GE Capital). Notably, GE Capital is engaged in providing financial services across various businesses.

General Electric will purchase any or all notes from the first set of securities. Notably, the notes issued by GE Capital include 4.650% notes due 2021, 3.150% notes due 2022 and 3.100% notes due 2023. Then again, General Electric issued notes carry a coupon rate of 2.700% and are set to expire in 2022.

From the second set, General Electric will purchase notes worth $1 billion. The notes include 6.150% notes due 2037, 5.875% notes due 2038 and 6.875% notes due 2039. All notes under this set have been originally issued by GE Capital, while have been assumed by General Electric.

As regard to the third set, all notes have been originally issued by General Electric. The company will purchase notes worth $1 billion from this set. It includes 4.250% notes due 2040, 4.125% notes due 2042, 4.500% notes due 2044 and 4.350% notes due 2050.

The principal amount of the aforementioned types of securities in the three sets is $1,000. Securities purchased by the company will be retired and canceled.

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, going forward. Exiting first-quarter 2021, General Electric’s borrowings were $66.9 billion, down 4.8% from $70.3 billion at the end of the fourth quarter of 2020.

Zacks Rank, Share Price Performance and Earnings Estimates

General Electric currently has a market capitalization of $116.1 billion and a Zacks Rank #3 (Hold). Solid liquidity position, portfolio-restructuring measures and actions to lower debts are expected to aid the company in the quarters ahead. However, the market-related challenges in the aviation business are concerning for the company.

In the past three months, the conglomerate’s shares have gained 5.1% as compared with the industry’s growth of 11.9%.




 

In the past 30 days, the Zacks Consensus Estimate for its earnings is pegged at 4 cents for the second quarter of 2021, reflecting growth of 33.3% from the 30-day-ago figure. Notably, the estimate is pegged at 26 cents for 2021 and 53 cents for 2022, reflecting increases of 8.3% and 1.9% from the respective 30-day-ago estimates.

General Electric Company Price and Consensus

 

General Electric Company Price and Consensus

General Electric Company price-consensus-chart | General Electric Company Quote

Stocks to Consider

Three better-ranked stocks in the industry are Griffon Corporation (GFF - Free Report) , Crane Co. (CR - Free Report) and ITT Inc. (ITT - Free Report) . While Griffon presently sports a Zacks Rank #1 (Strong Buy), both Crane and ITT carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, earnings estimates for the companies have improved for the current year. Also, earnings surprise for the last reported quarter was 50.00% for Griffon, 26.72% for Crane and 21.84% for ITT.

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