April 13, 2020 / 1:57 PM / 2 months ago

GE offers to buy back at least $9 billion in debt, plans new longer-maturities issue

(Reuters) - General Electric Co (GE.N) offered on Monday to buy back at least $9 billion in debt as part of a plan to cut its financial risk and manage liquidity in response to the downturn in business caused by the coronavirus pandemic.

FILE PHOTO: The General Electric Co. logo is seen on the company's corporate headquarters building in Boston, Massachusetts, U.S. July 23, 2019. REUTERS/Alwyn Scott

The company’s GE Capital unit offered to buy and retire about $9 billion in debt while the parent company offered to buy an unspecified amount of bonds of its industrial businesses, with the total to be set by a separate new offer of debt with longer maturities. Tenders for both offers expire on April 20.

GE said it aims to buy industrial notes maturing through 2024 and the amount depends on how much of the new debt investors agree to buy. The transactions will result in no net reduction in borrowing for the industrial businesses, but extends the maturity of that borrowing.

GE said it has $7.8 billion in industrial debt maturing between 2020 and 20204.

GE also said GE Capital had paid off $4.7 billion of debt that matured in the first quarter of 2020, and that GE had repaid $6 billion in intercompany loans to GE Capital, using proceeds from the recent sale of its biopharma business.

The company’s total borrowings stood at $90.9 billion as of Dec. 31.

GE’s shares were down about 5% at $6.78 on Monday.

The U.S. industrial conglomerate last week pulled its full-year forecast due to the uncertainties created by the coronavirus outbreak, but backed its first-quarter industrial free cash flow expectation of an outflow of nearly $2 billion.

The maker of jet engines, power plants and other industrial equipment last month sold its biopharma business to Danaher Corp (DHR.N), netting about $20 billion in cash.

GE said it held cash, cash equivalents, and restricted cash of more than $47 billion as of March 31.

GE also said it has refinanced a back-up credit facility that expires in 2021.

Reporting by Alwyn Scott in New York and Ankit Ajmera in Bengaluru; Editing by Saumyadeb Chakrabarty, Chris Reese and Tom Brown

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