Preliminary Pricing Supplement
Subject To Completion
Dated September 12, 2002
PROSPECTUS Preliminary Pricing Supplement No.
Dated April 9, 2002 Dated September __, 2002
PROSPECTUS SUPPLEMENT Rule 424(b)(3)-Registration Statement
Dated April 16, 2002 No. 333-84462
GENERAL ELECTRIC CAPITAL CORPORATION
GECC Extendible Monthly Securities
The floating rate notes described in this pricing supplement, which we refer
to as the GECC Extendible Monthly Securities (the "Notes"), will mature on the
initial maturity date, unless the Maturity of all or any portion of the
principal amount of the Notes is extended in accordance with the procedures
described below. In no event will the Maturity of the Notes be extended beyond
the Final Maturity Date.
During the notice period relating to each election date, you may elect to
extend the Maturity of all or any portion of the principal amount of your Notes
so that the Maturity of your Notes will be extended to the date occurring 366
calendar days from and including the 17/th/ day of the next succeeding month.
However, if that 366th calendar day is not a Business Day, the Maturity of your
Notes will be extended to the immediately preceding Business Day. The election
dates will be the 17/th/ calendar day of each month from October 2002 to
September 2006 inclusive, whether or not any such day is a Business Day.
You may elect to extend the Maturity of all of your Notes or of any portion
thereof having a principal amount of $1,000 or any multiple of $1,000 in excess
thereof. To make your election effective on any election date, you must deliver
a notice of election during the notice period for that election date. The
notice period for each election date will begin on the fifth Business Day prior
to the election date and end on the election date, however, if that election
date is not a Business Day, the notice period will be extended to the following
Business Day. Your notice of election must be delivered to the Trustee for the
Notes, through the normal clearing system channels described in more detail
below, no later than the close of business on the last Business Day in the
notice period relating to the applicable election date. Upon delivery to the
Trustee of a notice of election to extend the Maturity of the Notes or any
portion thereof during any notice period, that election will be revocable
during each day of such notice period, until 12:00 noon, New York City time, on
the last Business Day in the notice period relating to the applicable election
date, at which time such notice will become irrevocable.
If, with respect to any election date, you do not make an election to extend
the Maturity of all or any portion of the principal amount of your Notes, the
principal amount of the Notes for which you have failed to make such an
election will become due and payable on the initial maturity date, or any later
date to which the Maturity of your Notes has previously been extended. The
principal amount of the Notes for which such election is not exercised will be
represented by a note issued on such election date. The note so issued will
have the same terms as the Notes, except that it will not be extendible, will
have a separate CUSIP number and its maturity date will be the date that is 366
calendar days from and including such election date or, if such 366/th/
calendar day is not a Business Day, the immediately preceding Business Day. The
failure to elect to extend the Maturity of all or any portion of the Notes will
be irrevocable and will be binding upon any subsequent holder of such Notes.
PS-1
(GECC Extendible Monthly Securities)
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Rule 424(b)(3)-Registration Statement
No. 333-84460
The Notes will bear interest from the date of issuance until the principal
amount thereof is paid or made available for payment at a rate determined for
each Interest Reset Period by reference to the base rate, based on the index
maturity, plus the applicable spread for the applicable Interest Reset Date. We
describe how floating rates are determined and calculated in the section called
"Interest and Interest Rates--Floating Rate Notes" in the accompanying
prospectus supplement, subject to and as modified by the provisions described
below.
The Notes will be issued in registered global form and will remain on
deposit with the Depositary for the Notes. Therefore, you must exercise the
option to extend the Maturity of your Notes through the Depositary. To ensure
that the Depositary will receive timely notice of your election to extend the
Maturity of all or a portion of your Notes, so that it can deliver notice of
your election to the Trustee prior to the close of business on the last
Business Day in the notice period, you must instruct the direct or indirect
participant through which you hold an interest in the Notes to notify the
Depositary of your election to extend the Maturity of your Notes in accordance
with the then applicable operating procedures of the Depositary.
The Depositary must receive any notice of election from its participants no
later than 12:00 noon (New York City time) on the last Business Day in the
notice period for any election date. Different firms have different deadlines
for accepting instructions from their customers. You should consult the direct
or indirect participant through which you hold an interest in the Notes to
ascertain the deadline for ensuring that timely notice will be delivered to the
Depositary. If the election date is not a Business Day, notice of your election
to extend the maturity date of your Notes must be delivered to the Depositary
by its participants no later than 12:00 noon (New York City time) on the first
Business Day following the election date.
The Notes will initially be limited to $ in aggregate principal
amount. We may create and issue additional floating rate notes with the same
terms as the Notes so that such additional floating rate notes will be combined
with this initial issuance of Notes.
CAPITALIZED TERMS USED IN THIS PRICING SUPPLEMENT WHICH ARE DEFINED IN THE
PROSPECTUS SUPPLEMENT SHALL HAVE THE MEANINGS ASSIGNED TO THEM IN THE
PROSPECTUS SUPPLEMENT.
PS-2
(GECC Extendible Monthly Securities)
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Rule 424(b)(3)-Registration Statement
No. 333-84460
Trade Date: September , 2002
Settlement Date (Original Issue Date): September , 2002
Initial Maturity Date: October 17, 2003, or if such day is not a Business Day, the
immediately preceding Business Day.
Final Maturity Date: October 17, 2007, or if such day is not a Business Day, the
immediately preceding Business Day.
Principal Amount (in Specified Currency): US$
Price to Public (Issue Price): 100%
Agent's Discount or Commission: 0.25%
Net Proceeds to Issuer (in Specified Currency): US$
Interest Rate:
Interest Calculation:
[X] Regular Floating Rate
[_] Inverse Floating Rate
[_] Other Floating Rate
Interest Rate Basis: [_] CD Rate [_] Commercial Paper Rate
[_] Federal Funds Rate (See "Additional Terms--Interest" below)
[X] LIBOR [_] Prime Rate [_] Treasury Rate
[_] Other (See "Additional Terms--Interest" below)
Spread: The table below indicates the applicable spread for the Interest Reset
Dates occurring during each of the indicated periods.
For Interest Reset Dates occurring: Spread:
From the original issue date
to and including September 2003 Plus .03%
From and including October 2003 to
and including September 2004 Plus .08%
From and including October 2004 to
and including September 2005 Plus .10%
From and including October 2005 to
and including September 2006 Plus .10%
From and including October 2006 to
and including September 2007 Plus .125%
PS-3
(GECC Extendible Monthly Securities)
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Rule 424(b)(3)-Registration Statement
No. 333-84462
Spread Multiplier: N/A
Index Maturity: One Month Index Currency: U.S. Dollar
Maximum Interest Rate: N/A Minimum Interest Rate: N/A
Interest Payment Period: Monthly. See also "Interest Payment Dates."
Interest Payment Dates: The 17/th/ day of each month, commencing October 17, 2002.
The final interest payment date for any Notes maturing prior to the Final
Maturity Date will be the relevant Maturity Date, and interest for the final
interest payment period will accrue from and including the interest payment
date in the month immediately preceding such relevant Maturity Date to but
excluding the Maturity Date.
Initial Interest Rate: One Month LIBOR plus .03%, to be determined two London Business Days
prior to the Original Issue Date.
Initial Interest Reset Date: October 17, 2002
Interest Reset Dates: The 17/th/ day of each month, commencing October 17, 2002
Interest Reset Periods: The first interest reset period will be the period from and including
October 17, 2002 to but excluding the immediately succeeding Interest
Reset Date. Thereafter, the interest reset periods will be the periods from
and including an Interest Reset Date to but excluding the immediately
succeeding Interest Reset Date; provided that the final interest reset period
for any Notes maturing prior to the Final Maturity Date will be the period
from and including the Interest Reset Date in the month immediately
preceding the relevant Maturity Date of such Notes to the relevant Maturity
Date.
Interest Determination Dates: Two London Business Days prior to the Interest Reset Dates.
Election Dates and Notice Periods: The election date shall be the 17/th/ calendar day of each month from October
2002 to September 2006 inclusive, whether or not such day is a Business
Day. The notice period for each election date will begin on the fifth
Business Day prior to the election date and end on the election date,
however, if that election date is not a Business Day, the notice period will
be extended to the following Business Day.
PS-4
(GECC Extendible Monthly Securities)
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Rule 424(b)(3)-Registration Statement
No. 333-84462
Form of Notes:
[X] DTC registered [_] non-DTC registered
Repayment, Redemption and Acceleration:
Optional Repayment Date: N/A
Annual Redemption Percentage N/A
Reduction:
Initial Redemption Date: N/A
Initial Redemption Percentage: N/A
Original Issue Discount
Amount of OID: N/A
Interest Accrual Date: N/A
Yield to Maturity: N/A
Initial Accrual Period OID: N/A
Amortizing Notes:
Amortization Schedule: N/A
Dual Currency Notes:
Face Amount Currency: N/A
Optional Payment Currency: N/A
Designated Exchange Rate: N/A
Indexed Notes:
Currency Base Rate: N/A
Calculation Agent: JPMorgan Chase Bank
CUSIP No.
Additional Information:
Recent Events:
On July 26, 2002, General Electric Company ("GE") announced organizational
changes that will result in the businesses that comprise GE Capital Services
becoming four separate businesses, effective August 1, 2002: GE Commercial
Finance, GE Insurance, GE Consumer Finance and GE Equipment Management. Each of
these businesses will report directly to Jeff Immelt, Chairman and Chief
Executive Officer of GE and GE Vice Chairman, Dennis Dammerman. GE Capital
Services and GE Capital Corporation will remain legal entities and continue as
the major borrowers of funds necessary to support all of GE's financial
services activities.
General.
At June 29, 2002, the Company had outstanding indebtedness totaling $249.497
billion, consisting of notes payable within one year, senior notes payable
after one year and subordinated notes payable after one year. The total amount
of outstanding indebtedness at June 29, 2002 excluding subordinated notes
payable after one year was equal to $248.614 billion.
PS-5
(GECC Extendible Monthly Securities)
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Rule 424(b)(3)-Registration Statement
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Consolidated Ratio of Earnings to Fixed Charges:
The information contained in the Prospectus under the caption "Consolidated
Ratio of Earnings to Fixed Charges" is hereby amended in its entirety, as
follows:
Year Ended December 31, Six Months
--------------------------------------------- Ended
1997 1998 1999 2000 2001 June 29, 2002
---- ---- ---- ---- ---- -------------
1.48 1.50 1.60 1.52 1.72 1.61
Plan of Distribution:
The Notes are being purchased severally by Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Morgan Stanley & Co. Incorporated (collectively, the
"Underwriters"), as principal, in the respective amounts set forth below at
100% of their aggregate principal amount less an underwriting discount equal to
0.25% of the principal amount of the Notes. GECC Capital Markets Group, Inc. is
acting as agent (the "Agent") in connection with the distribution of the Notes.
The Agent will receive a selling commission equal to 0.25% of the principal
amount of the Notes.
Underwriter/Agent Principal Amount of Notes
-----------------------------------------------------
Merrill Lynch, Pierce,
Fenner &
Smith Incorporated $
-----------------------------------------------------
Morgan Stanley & Co.
Incorporated $
-----------------------------------------------------
GECC Capital Markets
Group, Inc. $
-----------------------------------------------------
Total $
The Company has agreed to indemnify the Underwriters and the Agent against
and contribute toward certain liabilities, including liability under the
Securities Act of 1933, as amended.
United States Federal Taxation:
The following discussions are based on the opinion of Sidley Austin Brown &
Wood LLP, the Company's special tax counsel ("Special Tax Counsel").
An election to extend the maturity of all or any portion of the principal
amount of the Notes in accordance with the procedures described above should
not be a taxable event for U.S. federal income tax purposes. Special Tax
Counsel has reached this conclusion based, in part, upon the Treasury
regulations governing original issue discount on debt instruments (the "OID
Regulations").
Pursuant to Treasury regulations governing modifications to the terms of
debt instruments (the "Modification Regulations"), the exercise of an option by
a holder of a debt instrument to defer any scheduled payment of principal is a
taxable event if, based on all the facts and circumstances, such deferral is
considered material under the Modification Regulations. The Modification
Regulations do not specifically address the unique features of the Notes
(including their economic equivalence to a five-year debt instrument containing
put options). However, under the OID Regulations, for purposes of determining
the yield and maturity of a debt
PS-6
(GECC Extendible Monthly Securities)
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Rule 424(b)(3)-Registration Statement
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instrument that provides the holder with an unconditional option or options,
exercisable on one or more dates during the term of the debt instrument, that,
if exercised, require payments to be made on the debt instrument under an
alternative payment schedule or schedules (e.g., an option to extend the
maturity of the debt instrument), a holder is deemed to exercise or not
exercise an option or combination of options in a manner that maximizes the
yield on the debt instrument. Since the Spread will periodically increase
during the term of the Notes from an initial amount equal to .03% to an amount
equal to .125%, under these rules, as of the Original Issue Date, original
holders of the Notes should be deemed to elect to extend the maturity of all of
the principal amount of the Notes to the Final Maturity Date in accordance with
the procedures described above. Accordingly, under these rules, the Final
Maturity Date should be treated as the maturity date of the Notes. Although it
is unclear how the OID Regulations should apply in conjunction with the
Modification Regulations to the Notes, Special Tax Counsel is of the opinion
that, based upon the OID Regulations, an election to extend the maturity of all
or any portion of the principal amount of the Notes in accordance with the
procedures described above should not be a taxable event for U.S. federal
income tax purposes. In addition, the Notes should not constitute contingent
payment debt instruments that would be subject to certain Treasury regulations
governing contingent payment obligations (the "Contingent Payment Regulations").
Under the treatment described above, the Notes will be treated as having
been issued with de minimis original issue discount. Therefore, the Notes will
not constitute OID Notes.
Prospective investors should note that no assurance can be given that the
IRS will accept, or that the courts will uphold, the characterization and the
tax treatment of the Notes described above. If the IRS were successful in
asserting that an election to extend the maturity of all or any portion of the
principal amount of the Notes is a taxable event for U.S. federal income tax
purposes, then Special Tax Counsel has indicated that you would be required to
recognize any gain inherent in the Notes at such time upon the exercise of such
election. Also, if the IRS were successful in asserting that the Notes were
subject to the Contingent Payment Regulations, Special Tax Counsel has
indicated that the timing and character of income thereon would be affected.
Among other things, you may be required to accrue original issue discount
income, subject to adjustments, at a "comparable yield" on the issue price.
Furthermore, any gain recognized with respect to the Notes would generally be
treated as ordinary income. The foregoing is a summary of the views of Special
Tax Counsel to the Company and is not to be construed as tax advice for
investors. Prospective investors should consult their tax advisor regarding the
U.S. federal income tax consequences of an investment in, and extending the
maturity of, the Notes.
Prospective investors should also consult the summary describing the
principal U.S. federal income tax consequences of the ownership and disposition
of the Notes contained in the section called "United States Tax Considerations"
in the accompanying Prospectus Supplement.
PS-7