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.
After relying solely on GE Capital for financing since 1996, Penske Truck hired JPMorgan Chase & Co. to arrange a $1 billion loan and plans to tap the corporate bond market as borrowing costs reach record lows. The transactions come as GE Capital shrinks assets after $32 billion of credit losses in the aftermath of Lehman Brothers Holdings Inc.'s 2008 collapse.
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