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General Electric Reopens Debt Offerings, Grabs Turbine Deal
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General Electric Company (GE - Free Report) on Jun 8, 2020, announced that it reopened parts of its previous debt offerings for total proceeds of $3 billion in an attempt to improve its cash reserves. As noted, the reopening was in response to a reverse inquiry done by one of the company’s long-term investors.
Notably, General Electric intends to utilize the funds for lowering short-term debt and expects the deal to be leverage-neutral.
As communicated, $1.5 billion worth of 4.350% notes ("GE notes") due to expire in 2050 have been priced to the public at 100.176% of the principal amount. Notably, the GE notes fall under the same category of notes issued by the company on Apr 22, 2020.
In addition, the company’s business segment, GE Capital priced $1.5 billion worth of 4.400% notes ("GE Capital notes") due to expire in 2030 at 105.074% of the principal amount. GE Capital notes have been issued in a private offering. The GE Capital notes fall under the same category of notes issued on May 18, 2020. It is worth mentioning here that the notes issued by GE Capital will be guaranteed by General Electric.
In addition, on the same day, the company announced that it clinched a gas turbine upgrade contract from power producer JFE Steel Corporation (“JFE”). Notably, General Electric will work on upgrading JFE’s current GT26 MXL2 unit, with its advanced high-efficiency technology at the Chiba Power Plant based in Japan. The modernization will help JFE to boost the efficiency of the plant by more than 1%, apart from enhancing the power output by more than 10 megawatts.
Going forward, growth in the digital business, efforts to reduce leverage and lowering exposure to the GE Capital business might be beneficial for the company. Also, its portfolio-restructuring program will likely help it in transforming it into a high-tech industrial company. However, in the near term, negative impacts of the pandemic on its Industrial and GE capital businesses are concerning.
Over the past three months, General Electric’s share price has decreased 4.4% against the industry’s growth of 3.5%.
In the past 60 days, the Zacks Consensus Estimate for the company’s earnings has declined 90% to 4 cents for 2020 on account of eight downward estimate revisions against none upward. In addition, over the same timeframe, the consensus estimate for 2021 earnings has trended down 42.9% to 36 cents on seven downward estimate revisions against none upward revisions.
Three companies from the industry that compete with General Electric are Honeywell International Inc. (HON - Free Report) , 3M Company (MMM - Free Report) and Raytheon Technologies Corporation (RTX - Free Report) .
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General Electric Reopens Debt Offerings, Grabs Turbine Deal
General Electric Company (GE - Free Report) on Jun 8, 2020, announced that it reopened parts of its previous debt offerings for total proceeds of $3 billion in an attempt to improve its cash reserves. As noted, the reopening was in response to a reverse inquiry done by one of the company’s long-term investors.
Notably, General Electric intends to utilize the funds for lowering short-term debt and expects the deal to be leverage-neutral.
As communicated, $1.5 billion worth of 4.350% notes ("GE notes") due to expire in 2050 have been priced to the public at 100.176% of the principal amount. Notably, the GE notes fall under the same category of notes issued by the company on Apr 22, 2020.
In addition, the company’s business segment, GE Capital priced $1.5 billion worth of 4.400% notes ("GE Capital notes") due to expire in 2030 at 105.074% of the principal amount. GE Capital notes have been issued in a private offering. The GE Capital notes fall under the same category of notes issued on May 18, 2020. It is worth mentioning here that the notes issued by GE Capital will be guaranteed by General Electric.
In addition, on the same day, the company announced that it clinched a gas turbine upgrade contract from power producer JFE Steel Corporation (“JFE”). Notably, General Electric will work on upgrading JFE’s current GT26 MXL2 unit, with its advanced high-efficiency technology at the Chiba Power Plant based in Japan. The modernization will help JFE to boost the efficiency of the plant by more than 1%, apart from enhancing the power output by more than 10 megawatts.
Zacks Rank, Price Performance and Estimate Trend
General Electric, with a $74-billion market capitalization, currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Going forward, growth in the digital business, efforts to reduce leverage and lowering exposure to the GE Capital business might be beneficial for the company. Also, its portfolio-restructuring program will likely help it in transforming it into a high-tech industrial company. However, in the near term, negative impacts of the pandemic on its Industrial and GE capital businesses are concerning.
Over the past three months, General Electric’s share price has decreased 4.4% against the industry’s growth of 3.5%.
In the past 60 days, the Zacks Consensus Estimate for the company’s earnings has declined 90% to 4 cents for 2020 on account of eight downward estimate revisions against none upward. In addition, over the same timeframe, the consensus estimate for 2021 earnings has trended down 42.9% to 36 cents on seven downward estimate revisions against none upward revisions.
Three companies from the industry that compete with General Electric are Honeywell International Inc. (HON - Free Report) , 3M Company (MMM - Free Report) and Raytheon Technologies Corporation (RTX - Free Report) .
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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