Mubadala GE Capital Considers Bond Issue

The company is casting its eye over potential arrangers of the bond, though no banks have been mandated yet for the trade, sources say.



Mubadala GE Capital, the commercial financing joint venture between Abu Dhabi’s Mubadala and US firm GE, is considering raising funds through bond markets, market sources told IFR.

The company, a 50/50 partnership between the two parents, is casting its eye over potential arrangers of the bond, though no banks have been mandated yet for the trade, added the sources.

The joint venture provides commercial lending, equipment leasing, distribution and vendor finance solutions among other services.

As it does not have any customer deposits to support its lending, it needs to fund itself by other means such as through loan or bond markets.

In the past, state-owned Mubadala has allocated some of its capital expenditure to Mubadala GE Capital.

However, Gulf governments are now encouraging joint ventures between state-owned companies and foreign firms to fund themselves directly, bankers said, though these remarks were not made directly in relation to Mubadala GE Capital.

Mubadala was last in bond markets in April, when it issued a $750 million eight-year bond, according to IFR.

GE Capital became the first U.S. corporate to issue sukuk in November 2009. The $500 million, five-year Reg S sukuk matures later this year.

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