Log in
Login
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nyse  >  General Electric Company    GE

Delayed Quote. Delayed  - 05/26 10:00:06 pm
30.02 USD   -0.23%
05/26 GENERAL ELECTRI : GE Makes Deals with Saudi Arabia Worth 1.4 Billion
05/26 GENERAL ELECTRI : GE Oil & Gas to use robotics and 3D printing in fu..
05/26 GENERAL ELECTRI : leads the creation of a joint venture with Mara Gr..
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

General Electric Company : GE Selling $3 Billion Bond Deal; Success Could Spur More Issuance

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/24/2012 | 08:04pm CEST

--General Electric selling two-part bond deal

--Strong demand has deal "well oversubscribed"

--Other issuers waiting for stability, clarity from Fed

 
   By Patrick McGee 
   Of  
 

General Electric Co. (GE) is single-handedly demonstrating that buyers are comfortable scooping up newly issued corporate debt.

GE is selling $1 billion of floating-rate notes due in two years, giving investors 0.70 percentage point above the three-month London interbank offered rate, as well as $2 billion of five-year fixed-rate bonds at 1.5 points above Treasurys, according to a term sheet seen by Dow Jones Newswires.

Originally, only the five-year note was on offer. A banker working on the deal said it was "well oversubscribed" and motivated the company to add another tranche.

The GE deal is the first high-grade bond to hit the primary market this week, following the two slowest weeks of new-issuance in 2012. The lull follows one of the busiest quarters on record.

Syndicate managers say investors have cash to deploy for the right companies, but borrowers have been hesitant to issue debt this month given the volatile backdrop. Today's climate is more favorable--Markit's CDX North America Investment-Grade Index, a proxy for risk, improved 1.3% in early trading--but most companies are still residing on the sidelines until the Federal Reserve offers more clarity Wednesday on the direction of monetary policy.

"Issuers are looking for more stable ground before they tap the market," said Tim Cox, executive director of debt capital markets at Mizuho Securities. "Issuers like where Treasurys are, but they need more of a positive tone" to feel enticed into the market.

April's flight to quality has enabled corporate bonds to deliver a 1.10% total return so far this month, even as spreads to Treasurys have climbed 12 basis points to 190, their widest in two months, according to the Barclays U.S. investment-grade index. Corporate yields have been pulled down 8 basis points to 3.32%, as of Monday, just 5 basis points from the multi-decade low reached in early March.

Cox said a good experience for GE could "absolutely" improve confidence for other companies to issue debt.

New volume this month totaled just $26.2 billion, according to Dealogic data Monday. Syndicate desks were expecting more like $50 billion for the month, but companies have been in no rush after issuing more than $23 billion, on average, in each week of the first quarter.

April is typically slow because of earnings-related blackout periods.

"We're coming out of blackout so I think a lot of accounts are waiting on the edge of their seats for new deals," Cox added. "We're on the cusp to seeing the floodgates open," but global instability has shut down opportunistic borrowing.

-By Patrick McGee, Dow Jones Newswires; 212-416-2382; patrick.mcgee@dowjones.com

share with twitter share with LinkedIn share with facebook
share via e-mail
0
React to this article
Latest news on GENERAL ELECTRIC COMPANY
05/26 GENERAL ELECTRIC : GE Makes Deals with Saudi Arabia Worth 1.4 Billion
05/26 GENERAL ELECTRIC : U.S. Patents Awarded to Inventors in Kentucky (May 26)
05/26 GENERAL ELECTRIC : U.S. Patents Awarded to Inventors in District of Columbia (Ma..
05/26 GENERAL ELECTRIC : U.S. Patents Awarded to Inventors in Texas (May 26)
05/26 GENERAL ELECTRIC : U.S. Patents Awarded to Inventors in South Carolina (May 26)
05/26 GENERAL ELECTRIC : U.S. Patents Awarded to Inventors in North Carolina (May 26)
05/26 GENERAL ELECTRIC : U.S. Patents Awarded to Inventors in Massachusetts (May 26)
05/26 GENERAL ELECTRIC : U.S. Patents Awarded to Inventors in Utah (May 26)
05/26 GENERAL ELECTRIC : GE Oil & Gas to use robotics and 3D printing in futuristic Ta..
05/26 GENERAL ELECTRIC : leads the creation of a joint venture with Mara Group and Atl..
Advertisement
News chart
Full-screen chart
Income Statement Evolution
More Financials