Summary
General Electric Company (GE) announced on February 13, 2023, its decision to partially redeem 3,000,000 shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D. This redemption, set for March 15, 2023, will be executed at a price of $1,000 per share, totaling $3 billion in cash. The company expects this action to yield approximately $0.1 billion in net annual savings, primarily from reduced dividend payments, partially offset by foregone interest income on the cash used for redemption. This move is significant as GE continues its strategic transformation. The redemption reflects management's proactive approach to optimizing its capital structure and reducing future interest expenses, particularly in the context of current LIBOR rates. Investors should note that the redemption price does not include declared and unpaid dividends, which will be paid separately on the same date to shareholders of record prior to the redemption.
Key Highlights
- 1GE announced the partial redemption of 3,000,000 shares of its Series D Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock.
- 2The redemption date is set for March 15, 2023, with a redemption price of $1,000 per share, amounting to a total cash outlay of $3 billion.
- 3The company anticipates net annual savings of approximately $0.1 billion from this redemption.
- 4Savings are attributed to reduced dividend payments, with a partial offset from foregone earnings on cash used.
- 5The redemption is influenced by current LIBOR interest rates.
- 6Dividends on the redeemed shares will cease to accrue after the March 15, 2023 redemption date.
- 7Regular dividends on all outstanding preferred stock will be paid separately on March 15, 2023, to holders of record as of February 28, 2023.