General Electric (GE) Increases Price on Single Tranche Bond to $475M from $400M - DJN
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General Electric Co. (NYSE: GE) priced a deal Thursday that was increased to $475 million from an original $400 million, a Dow Jones Newswire reported.
The single tranche bond, dubbed GEMNT 2009-4, is backed by credit card debt and the sold lead is Citigroup. It sold at 140 basis points over a benchmark.
The bond isn't eligible for a Federal Reserve program to boost this market and was done as a result of reverse enquiry. The increase in size shows healthy investor appetite for the deal even though they can't use cheap funds from the central bank through its Term Asset-Backed Securities Loan Facility, or TALF, program to purchase it.
Other non-TALF issuers this week include Ford Motor Co.; Chrysler Financial; SLM Corp., or Sallie Mae; and CenterPoint Energy Restoration Bond Co. LLC.
These issuers are actively avoiding the Fed's program by offering deals well ahead of the monthly loan application deadline. Earlier in the year, they had leaned on the program to draw investors to buy their bonds.
Risk premiums on these deals have tightened and issuers and investors are once again able to operate without the Fed's direct help.
The next deadline for the consumer-loan-backed portion of TALF is Dec. 3.
Year-to-date issuance of consumer loan-backed deals stands at $124.7 billion, according to a note from Citi. In 2008, that figure was $127.23 billion. The bulk of issuance this year has been of TALF-eligible deals, at more than $90 billion so far.
Auto loan-backed deals comprise 41.06% or $51.21 billion this year, versus 27% or $34.35 billion last year. Credit-card loan-backed deals have fallen to 32% or $39.98 billion this year from 46.4% or $59.06 billion last year.
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