22.09.2015, 17:39
GE Capital Announces Private Exchange Offers for Certain Outstanding Notes of GE Capital from Eligible Holders
OREANDA-NEWS. General Electric Capital Corporation (“GECC”) today announced that a newly formed finance subsidiary, GE International Funding Company (the “Issuer”), has commenced private offers to exchange (the “Exchange Offers”) the Issuer’s new notes (collectively, the “New Notes”) for the outstanding debt securities (collectively, the “Old Notes”) listed below under the heading “Exchange Offers Summary Tables.”
On April 10, 2015, General Electric Company (“GE”) announced a plan to reduce the size of its financial services businesses through the sale of most of the assets of GECC and to focus on continued investment and growth in GE’s industrial businesses (the “GE Capital Exit Plan”). That announcement also noted that the GE Capital Exit Plan would involve a merger of GECC with and into GE (the “Merger”) to assure compliance with debt covenants as GECC exits the assets planned for disposition. The Merger is part of a reorganization of GECC’s businesses (the “Reorganization”) pursuant to which GE will also separate GECC’s international and U.S. operations, and GECC’s international operations will be consolidated under a new international holding company (“GE Capital International Holdings”), which will have a separate capital structure and be separately supervised. The Reorganization and Exchange Offers are intended, among other things, to establish an international holding company (GE Capital International Holdings) with an efficient and simplified capital structure that is satisfactory to GECC’s regulators, a key step in terminating the nonbank systemically important financial institution designation for GECC. In addition, the Exchange Offers seek to align the liabilities of GE Capital International Holdings to its assets from a maturity profile and liquidity standpoint, taking into consideration asset sales, and where appropriate shortening the maturity profile of targeted liabilities.
The Issuer is a newly formed finance subsidiary of GECC, but upon the completion of the Reorganization, the Issuer will become a subsidiary of GE Capital International Holdings. The New Notes will be fully, irrevocably and unconditionally guaranteed by GE, and the Old Notes are fully, irrevocably and unconditionally guaranteed by GE and will subsequently be assumed by GE in connection with the Merger. The New Notes initially will also be guaranteed by GECC, and upon completion of the Reorganization, GE Capital International Holdings will assume the guarantee by GECC. The Exchange Offers are not conditioned on the completion of the Reorganization.
Overview of the Exchange Offers
There are 123 series or tranches of Old Notes that may be tendered in one or more of the Exchange Offers, in each case as set forth in the “Exchange Offers Summary Tables” below.
The Exchange Offers include “Market Value Exchange Offers” and “Par for Par Exchange Offers.” The Market Value Exchange Offers consist of offers to exchange Old Notes for New Notes (“New Market Notes”) with either a six-month (the “2016 Market Value Exchange Offers”), 5 year, 10 year or 20 year maturity (the “2020/2025/2035 Market Value Exchange Offers”). In the Market Value Exchange Offers, the Total Exchange Consideration (as defined below) consists of New Market Notes issued in a principal amount and at market rates determined based on the methodology described below. The “Par for Par Exchange Offers” consist of offers to exchange Old Notes for New Notes (“New Par Notes”) in the same principal amount and with the same currency, maturity, interest rates and other payment terms as the Old Notes tendered. In the Par for Par Exchange Offers, the Total Exchange Consideration includes an additional cash payment as specified below for each series or tranche of Old Notes.
Each series or tranche of Old Notes may be tendered in the Par for Par Exchange Offers. In addition, most series or tranches of Old Notes may also be tendered in one or two of the Market Value Exchange Offers, in each case as specified in the “Exchange Offers Summary Tables” below. As a result, in certain cases, a series or tranche of Old Notes may be tendered in a 2016 Market Value Exchange Offer or a Par for Par Exchange Offer and, in certain other cases, a series or tranche of Old Notes may be tendered in a 2016 Market Value Exchange Offer, a 2020/2025/2035 Market Value Exchange Offer or a Par for Par Exchange Offer.
For each tender of Old Notes, Eligible Holders (as defined below) must elect a single Exchange Offer in which such Old Notes will be tendered (i.e., the same Old Notes may not be tendered in more than one Exchange Offer concurrently).
On April 10, 2015, General Electric Company (“GE”) announced a plan to reduce the size of its financial services businesses through the sale of most of the assets of GECC and to focus on continued investment and growth in GE’s industrial businesses (the “GE Capital Exit Plan”). That announcement also noted that the GE Capital Exit Plan would involve a merger of GECC with and into GE (the “Merger”) to assure compliance with debt covenants as GECC exits the assets planned for disposition. The Merger is part of a reorganization of GECC’s businesses (the “Reorganization”) pursuant to which GE will also separate GECC’s international and U.S. operations, and GECC’s international operations will be consolidated under a new international holding company (“GE Capital International Holdings”), which will have a separate capital structure and be separately supervised. The Reorganization and Exchange Offers are intended, among other things, to establish an international holding company (GE Capital International Holdings) with an efficient and simplified capital structure that is satisfactory to GECC’s regulators, a key step in terminating the nonbank systemically important financial institution designation for GECC. In addition, the Exchange Offers seek to align the liabilities of GE Capital International Holdings to its assets from a maturity profile and liquidity standpoint, taking into consideration asset sales, and where appropriate shortening the maturity profile of targeted liabilities.
The Issuer is a newly formed finance subsidiary of GECC, but upon the completion of the Reorganization, the Issuer will become a subsidiary of GE Capital International Holdings. The New Notes will be fully, irrevocably and unconditionally guaranteed by GE, and the Old Notes are fully, irrevocably and unconditionally guaranteed by GE and will subsequently be assumed by GE in connection with the Merger. The New Notes initially will also be guaranteed by GECC, and upon completion of the Reorganization, GE Capital International Holdings will assume the guarantee by GECC. The Exchange Offers are not conditioned on the completion of the Reorganization.
Overview of the Exchange Offers
There are 123 series or tranches of Old Notes that may be tendered in one or more of the Exchange Offers, in each case as set forth in the “Exchange Offers Summary Tables” below.
The Exchange Offers include “Market Value Exchange Offers” and “Par for Par Exchange Offers.” The Market Value Exchange Offers consist of offers to exchange Old Notes for New Notes (“New Market Notes”) with either a six-month (the “2016 Market Value Exchange Offers”), 5 year, 10 year or 20 year maturity (the “2020/2025/2035 Market Value Exchange Offers”). In the Market Value Exchange Offers, the Total Exchange Consideration (as defined below) consists of New Market Notes issued in a principal amount and at market rates determined based on the methodology described below. The “Par for Par Exchange Offers” consist of offers to exchange Old Notes for New Notes (“New Par Notes”) in the same principal amount and with the same currency, maturity, interest rates and other payment terms as the Old Notes tendered. In the Par for Par Exchange Offers, the Total Exchange Consideration includes an additional cash payment as specified below for each series or tranche of Old Notes.
Each series or tranche of Old Notes may be tendered in the Par for Par Exchange Offers. In addition, most series or tranches of Old Notes may also be tendered in one or two of the Market Value Exchange Offers, in each case as specified in the “Exchange Offers Summary Tables” below. As a result, in certain cases, a series or tranche of Old Notes may be tendered in a 2016 Market Value Exchange Offer or a Par for Par Exchange Offer and, in certain other cases, a series or tranche of Old Notes may be tendered in a 2016 Market Value Exchange Offer, a 2020/2025/2035 Market Value Exchange Offer or a Par for Par Exchange Offer.
For each tender of Old Notes, Eligible Holders (as defined below) must elect a single Exchange Offer in which such Old Notes will be tendered (i.e., the same Old Notes may not be tendered in more than one Exchange Offer concurrently).
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