GE Capital, one of the operating segments
General Electric Company
), recently announced the redemption of all of its outstanding
6.50% GE Capital InterNotes due August 15, 2048. The notes will
be redeemed at a redemption price of $25 per note together with
unpaid accrued interest of $0.0315972.
The senior unsecured and unsubordinated notes worth $250
million were raised in 2008 to increase its liquidity. The
company had offered 10 million shares at par value of $25 each,
with 6.5% coupon payable quarterly. The redemption date is in
line with its previously announced call date of Aug 15, 2013.
During the last reported quarter, General Electric had total
debt of $387.3 billion. The redemption of the senior notes will
reduce the company's total outstanding debt to $387.05 billion.
General Electric is likely to save $4.06 million quarterly in
interest payments from this redemption.
General Electric is likely to use its strong cash on hand to
repay its existing debt. The company's cash & cash
equivalents increased 5.2% from $125.9 billion at year-end 2012
to $132.5 billion in the last reported quarter.
Historically, General Electric has generated a strong cash
flow that allows management to invest in product innovations,
acquisitions, and business development to fuel both organic and
inorganic growth. However, GE Capital's loan defaults are likely
to be a drag on the company's goodwill.
General Electric is one of the most diversified technologies
and financial service corporations in the world. Its segments
include Power & Water, Oil & Gas, Energy Management,
Aviation, Healthcare, Transportation, Home & Business
Solutions, and GE Capital. GE Capital GE Capital meets the
financial needs of businesses of all sizes. The segment includes
General Electric's Commercial Lending and Leasing, Consumer, Real
Estate, Energy Financial Services and GE Capital Aviation
Services businesses and General Electric Capital Corporation
General Electric currently has a Zacks Rank #2 (Buy). Better
placed stocks within the industry worth including are
Hutchison Whampoa Ltd
Macquarie Infrastructure Company LLC
PACKAGING CORPORATION OF AMERICA
), each carrying a Zacks Rank #2 (Buy).
GENL ELECTRIC (GE): Free Stock Analysis
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PACKAGING CORP (PKG): Free Stock Analysis
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