Daily News: March 16, 2012

Bloomberg: GE Capital Now Seen Safer Than Biggest Banks

Bloomberg noted in a story on Friday, March 16, 2012 that GE’s finance arm is pulling away from the biggest U.S. banks in the eyes of credit traders and investors, signaling an end to more than three years of repression for declining profits during the financial crisis.

Bloomberg said the cost to protect the debt of GE Capital with credit-default swaps narrowed to 135 basis points yesterday, or 52 basis points less than the 187 basis-point average for the six biggest U.S. lenders, according to data provider CMA.

Bloomberg also noted that yields on GE Capital’s bonds are falling relative to those of large banks. Its $2.75 billion of 4.65% notes due in October 2021 traded at 107.2 cents on the dollar to yield 3.75%, according to the bond-price reporting system of the Financial Industry Regulatory Authority. That’s 22 basis points less than JPMorgan Chase’s $3 billion of 4.35 percent debt due in August of the same year, which yields 3.97%, Bloomberg said.

To read the full text of the Bloomberg article: click here.