, which priced a $6 billion debt offering Friday, is paying dearly for the amount of debt already on its books.
GE's triple-A rated finance arm GE Capital, once considered the soundest bet in the debt markets, priced the offering at yields that fall in the bottom of the range the company set for itself, but well above what a triple-A rated company should pay in the current market, analysts said. GE Capital sold $3.75 billion of 10-year notes with yields 1.06 percentage points above 10-year U.S. Treasuries and $2.25 billion of five-year notes at 0.76 percentage points above five-year U.S. Treasuries.
The 10-year notes had been expected to yield between 1.05 and 1.10 percentage points above Treasuries with the same maturity, and the five-year notes were seen yielding 0.75 to 0.79 points above the government's five-year debt.
has taken heat from investors and ratings agencies for its reliance on short-term debt that isn't fully backed by bank lines and for poor disclosure about its growth strategy. As a general rule, financial companies are supposed to have under 40% of their debt in short-term instruments, whereas GE has closer to 49%.
Investors were particularly irked this March, when the company announced plans for a $50 billion debt sale less than a week after floating $11 billion on the market. GE has laid out a strategy to reduce its dependence on short-term debt, but some worry that the company's profitability will suffer as a result.
GE shares closed off 6 cents to $31.14. Since the $11 billion sale was completed on March 13, GE's shares have plunged 22%.