General Electric Co bonds rallied broadly on Monday after the company struck a deal to sell its biopharma business to Danaher Corp for $21.4 billion and said it would use cash from the deal to ease its massive debt burden.
(Reuters) – General Electric Co bonds rallied broadly on Monday after the company struck a deal to sell its biopharma business to Danaher Corp for $21.4 billion and said it would use cash from the deal to ease its massive debt burden.
Yields on GE bonds, which move in the opposite direction of their price, fell to the lowest in about four months across dozens of debt securities and the risk premium demanded by investors in exchange for holding GE paper declined. The price to insure its bonds against default also sank, registering their largest one-day drop in at least three years, according to data from IHS Markit.
The price increase on GE’s roughly $120 billion of bonds was the latest leg in a recovery so far this year after they took a pounding in late 2018 when its new chief executive, Larry Culp, said earlier restructuring efforts were falling short and that the company would need to take more-aggressive action to address its debt load in particular.
