Last week General Electric (GE) filed a shelf registration that will allow the company to offer senior or subordinated debt securities, preferred stock, common stock and warrants. GE intends to use the proceeds from the sale of securities for general corporate purposes. Such purposes include, but are not limited to, repayment of debt acquisitions, additions to working capital, capital expenditures and investments in subsidiaries.

Description Of Securities

  • The debt securities will be either senior or subordinated debt. The company may issue debt securities at any time in one or more series under the indentures.
  • GE is currently authorized to issue up to 13.2 billion shares of common stock. As of Jan. 31, 2019, GE had 8.7 billion of common stock outstanding.
  • Warrants may be issued independently or together with GE’s debt securities, common stock or preferred stock and may be attached to or separate from any offered debt securities. The warrants also may be traded separately from other securities.

General Electric Appears Thirsty For Capital

I have been bearish on GE for a while. My general thesis was that after trillions in stimulus from central bankers the global economy would eventually peak and GE’s industrial businesses would falter. In Q4 2018 Moody’s downgraded GE’s senior unsecured debt two notches from A2 to Baa1. Moody’s cited the “adverse impact on GE’s cash flows from the deteriorating performance of Power.” Moody’s suggested another downgrade could be forthcoming if GE did not meet certain metrics pertaining to cash flow and debt/EBITDA. Read more:

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