Back to top

Image: Bigstock

General Electric Takes Multiple Debt Restructuring Actions

Read MoreHide Full Article

General Electric Company (GE - Free Report) on May 15 communicated the completion of its debt tender offers announced on May 6. Also, the company announced the completion of its private debt offerings by GE Capital Funding, LLC.

It is worth noting here that General Electric’s share price decreased 3.7% on May 15, eventually closing the trading session at $5.49.

Inside the Headlines

As noted, the company’s tender offers were applied for notes issued by subsidiaries — including GE Capital European Funding Unlimited Company, General Electric Capital Corporation and GE Capital UK Funding Unlimited Company.

General Electric mentioned that 65.88% of 4.625% notes due 2021, 52.35% of 5.300% notes due 2021, 63.04% of 4.650% of notes due 2021, 48.36% of 3.150% of notes due 2022, 58.42% of 3.100% of notes due 2023, 54.57% of floating-rate notes due March 2023 and 42.59% of floating-rate notes due April 2023 were validly tendered. The notes were issued by General Electric Capital Corporation.

Further, 61.19% of floating-rate notes due 2021, 50.88% of 4.350% notes due 2021, 68.66% of 0.800% notes due 2022 and 58.80% of 2.625% notes due 2023 were also validly tendered. These Euro-denominated notes were issued by GE Capital European Funding Unlimited Company.

Also, 70.26% of 5.125% of notes due 2023 and 69.24% of 4.125% of notes due 2023 were validly tendered. The GBP-denominated notes were issued by GE Capital UK Funding Unlimited Company.

Of the above-mentioned validly tendered notes, the company accepted for purchase validly tendered 4.625% notes due 2021, 5.300% notes due 2021, floating-rate notes due 2021, 4.650% of notes due 2021, 4.350% notes due 2021, 0.800% notes due 2022, floating-rate notes due 2023 and 5.125% notes due 2023.

For every $1,000 principal amount, the company will pay $1,025 for 4.625% notes due 2021, $1,033.75 for 5.300% notes due 2021, $1,052.50 for 4.650% of notes due 2021, $1,062.50 for 4.350% notes due 2021 and $980 for floating-rate notes due 2023. Further, it will pay €1,000 for floating-rate notes due 2021 and €1,012.50 for 0.800% notes due 2022 for every €1,000 principal amount, while the same for 5.125% notes due 2023 will be £1,100.

In addition, GE Capital’s debt offerings are expected to bring $4.4 billion in gross proceeds. The amount will be used for purchasing the selected validly tendered notes (mentioned in the above paragraph).

It is worth mentioning here that the company expects the debt offerings and tender offerings to have a neutral impact on leverage, going forward.

Zacks Rank, Price Performance, Estimate Trend and Competitors

General Electric currently has a market capitalization of $48 billion and a Zacks Rank #3 (Hold). Debt reduction efforts, portfolio-restructuring actions and digital business might support the company’s performances in the quarters ahead. However, the coronavirus outbreak is expected to severely hurt its second-quarter performance — especially that of GECAS and Aviation.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 60 days, General Electric’s earnings estimates for 2020 and 2021 have changed. Currently, the Zacks Consensus Estimate for its earnings is pegged at 5 cents for 2020 and 36 cents for 2021, reflecting declines of 89.6% and 50% from the respective 60-day-ago figures.

General Electric Company Price and Consensus

 

General Electric Company Price and Consensus

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

The company’s share price has decreased 56.5% in the past three months compared with a 26.8% decline recorded by the industry.




 

Three competitors in the industry, ITT Inc. (ITT - Free Report) , 3M Company (MMM - Free Report) and Honeywell International Inc. (HON - Free Report) have recorded declines of 29.1%, 13% and 30.7%, respectively, in the past three months.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.

This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.

See their latest picks free >>


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Honeywell International Inc. (HON) - free report >>

3M Company (MMM) - free report >>

ITT Inc. (ITT) - free report >>

General Electric Company (GE) - free report >>