General Electric Capital Corp. is taking aim at yield-hungry small investors: The finance arm of GE has launched a plan to sell $20 billion of bonds specifically to individuals.
The bonds are being sold as "InterNotes" through a 2-year-old program run by Incapital of Chicago and Banc of America Securities.
The InterNotes program lets small investors buy investment-grade bonds in increments of $1,000. Investors can choose how often to have interest payments made to their accounts.
GE Capital said its first sale through the program is notes maturing in three to 10 years. The yields range from 2.9% on the three-year notes to 4.95% on the 10-year issues.
"Retail investors are for GE Capital a large, mostly untapped base," Peter Stack, a GE Capital spokesman, said.
Investors must buy the bonds through participating brokerages, which include Charles Schwab, Prudential Securities and Edward Jones.
Incapital President Tom Ricketts said $14.5 billion of bonds have been sold through the program, which describes its offerings on a Web site
(www .internotes.com.) Issuing companies have included Dow Chemical Co. and units of Household International and Boeing Co.
Financial advisors cautioned that corporate bonds, even highly rated issues such as those of GE Capital, don't have the same ironclad safety of guaranteed principal repayment as U.S. Treasury securities.