US multinational conglomerate, General Electric Company (GE) announced the pricing for its debt tender offers in which it increased the size of buyback of its notes by up to $4.62bn. With the pricing of its debt tender offers, it expects to repurchase upto $7bn of its notes, up from the original $4.9bn. The increase represents a continued deleveraging plan of the company to strengthen its balance sheet and reduce the Net Debt to EBITDA less than 2.5x. The bonds on offer for purchase have been divided into three groups .
- The first group includes 4 securities with maturities between October 2021 and January 2023 with a total principal outstanding of $2.87bn in which the company may buy any and all notes.
- The second group includes 3 securities with maturities between August 2037 and January 2039 with a total principal outstanding $5.84bn. The purchase for this group has been raised up to ~$2.72bn after an upsizing from $1bn
- The third group includes 4 securities with maturities between May 2040 and May 2050 with a total principal outstanding of $7.11bn. The purchase for this group has been raised up to $3.91bn after being upsized from $1bn.
With this purchase, the company would reduce its gross debt by ~$50bn since the end of 2018. The offer expires on June 21, 2021. According to Bloomberg, the interest and other financial charges amounted to $3.27bn for the company in FY2020. As a part of the deleveraging process the company had sold its jet-leasing business GECAS to AerCap Holdings in a deal worth $30bn.
GE’s 3.45% 2024s and 4.5% 2044s were up 0.09 and 0.37 respectively to trade at 107.93 and 117.99 points on the secondary market.
For the full story and the list of notes under the tender offer, click here