Summary
On May 27, 2021, General Electric Company (GE) announced the execution of an amended and restated senior unsecured back-up revolving credit facility totaling $10 billion. This new facility replaces a previous $15 billion facility scheduled to mature in April 2023. The updated credit line extends the maturity date to May 27, 2026, providing GE with a longer-term liquidity backstop. Borrowings under this facility can be prepaid without penalty, offering flexibility in managing its debt obligations. This development is significant for investors as it demonstrates GE's proactive approach to managing its financial resources and ensuring access to capital. While the facility size has been reduced, the extended maturity and ongoing availability for general corporate purposes indicate a commitment to maintaining financial stability. Notably, the facility includes a net debt-to-EBITDA covenant, with specific exclusions related to GE Capital Corporation debt and EBITDA until two years following the closing of the AerCap transaction, which provides a temporary adjustment period for these metrics.
Key Highlights
- 1GE entered into a $10 billion amended and restated senior unsecured back-up revolving credit facility.
- 2The new facility matures on May 27, 2026, extending the maturity from the previous facility.
- 3The previous credit facility had an aggregate principal commitment of $15 billion and was set to mature in April 2023.
- 4Borrowings under the new facility can be prepaid without premium or penalty.
- 5The facility can be utilized for general corporate purposes.
- 6A net debt-to-EBITDA financial covenant is included, with specific temporary exclusions related to GE Capital and its subsidiaries' debt and EBITDA following the AerCap transaction closing.