GE Buoys Federal Signal's Liquidity - Analyst Blog

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GE Capital, Corporate Finance, an operating unit of the General Electric Company ( GE ), recently acted as a syndication agent to close a senior credit facility worth $225 million for Federal Signal Corp. ( FSS ). The transaction is expected to increase the liquidity of Federal Signal by refinancing its debt and facilitate its working capital requirements to drive further growth.

Headquartered in Oak Brook, Ill., Federal Signal is a premier manufacturer of diversified products and solutions serving the municipal, governmental, industrial and institutional segments. Since its inception in 1901, the company has diligently worked to enhance the safety, security and well-being of the communities and workplaces across the globe by offering products and services that adhere to stringent quality standards.

The refinanced credit facility has a 5-year term with an initial interest rate of LIBOR plus 2.75%, which is significantly lower than the 12% interest on the erstwhile term loan, resulting in an annual savings of over $10 million. With reduced interest burden, Federal Signal will increase its liquidity to strengthen its balance sheet and thereby meet its future working capital requirements.  

Over the years, GE Capital, Corporate Finance has provided asset-based, cash flow and structured loans to support working capital, growth, acquisitions, and balance sheet optimization in key sectors. It serves diversified sectors such as aerospace and defense; automotive and transportation; chemicals and plastics; construction and building products, corporate aircraft; energy; food and beverage; manufacturing; marine; metals and mining; paper, packaging and forest products; retail; and technology and electronics.

General Electric is one of the largest and the most diversified technology and financial services corporations in the world. With products and services ranging from aircraft engines, power generation, water processing, and security technology to medical imaging, business and consumer financing, media content and industrial products, the company serves over 100 million customers worldwide.

Its segments include Power & Water, Oil & Gas, Energy Management, Aviation, Healthcare, Transportation, Home & Business Solutions, and GE Capital. With 80 years of experience in consumer financing, GE Capital's Retail Finance business is one of the most successful retail lenders in the U.S. It offers private label and bankcard credit programs to leading national, regional and independent retailers in the U.S., as well as private label credit programs, promotional and installment lending, bankcards and financial services for consumers through dealers; contractors; manufacturers; healthcare practices; and service providers.

General Electric currently has a Zacks Rank #3 (Hold). Other companies in the industry worth mentioning are Crane Co. ( CR ) and Macquarie Infrastructure Company LLC ( MIC ), each carrying a Zacks Rank #2 (Buy).



CRANE CO (CR): Free Stock Analysis Report

FED SIGNAL CP (FSS): Free Stock Analysis Report

GENL ELECTRIC (GE): Free Stock Analysis Report

MACQUARIE INFRA (MIC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CR , FSS , GE , MIC

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