Boeing Capital sells Commercial Finance Unit to GE Commercial Finance

Boeing Capital Corporation announced today it has entered into an agreement to sell its Commercial Financial Services business to GE Commercial Finance, the business-to-business financial services unit of General Electric. The transaction includes approximately $2 billion in assets.

Under the terms of the agreement, BCC will receive a premium above net asset value at closing for the sale of the business. The all-cash transaction is expected to close during the second quarter of 2004.

“We are extremely pleased with the agreement that we have reached with GE Commercial Finance. This further advances our strategic priority to support the sale of Boeing products and services by arranging, structuring or providing financing. While the commercial finance business has been a solid contributor to our success, we believe it will be better positioned for growth within the GE Commercial Finance portfolio,” said BCC President Walt Skowronski.

“The transaction will enhance both cash flow and earnings by generating more than $1.7 billion in deployable cash after taxes and expenses,” said Skowronski. “The proceeds will be used to fund a combination of debt repayment, reinvestment and dividends to our parent. The transaction is projected to generate a modest gain upon closing.”

“This agreement brings us over 170 clients, and we look forward to doing a terrific job for them,” said Mike Neal, president and CEO, GE Commercial Finance. “This acquisition of a seasoned, balanced portfolio is very much in line with our growth plans for 2004.”

BCC’s Commercial Financial Services unit provides lease and loan financing for a variety of commercial assets, including business aircraft, machine tools, marine vessels and construction equipment. The unit currently has approximately 50 employees.

After the transaction is completed, BCC will have a customer financing portfolio of approximately $10 billion, primarily consisting of Boeing commercial aircraft.