General Electric Co.’s finance unit has bankrolled Penske Truck Leasing Co. for more than 15 years. That’s about to change.
The joint venture between GE Capital Corp. and companies controlled by Roger Penske, a member of GE’s board, plans to refinance $6.4 billion of borrowings over the next two years. A $700 million offering last month of unsecured bonds due in June 2019, used to finance an equity infusion, was the first step, according to a statement this week.
Proceeds from the offering will be used to finance an equity injection by LJ VP into Penske Truck Leasing, the companies said. The leasing company will use that money to repay borrowings from GE Capital, Penske said in the statement.
The venture may also turn to asset-backed debt secured by its vehicles and leases as it seeks to “repay in full our debt to GE Capital as soon as reasonably practicable,” it said in the prospectus. It plans to end borrowing under its loan agreement with GE Capital.