SC likely to have finance victims

Hanover Finance is the latest -- and biggest -- finance company to admit it has problems and announce it has frozen investors' money and started work on a restructuring plan.

The news from Hanover takes the toll of collapsed or troubled finance companies to 26 in the past two years with 23 of those in just the past 12 months.

However, South Canterbury Finance was yesterday rated highly for survivability.

The company is one of only three New Zealand finance companies with the "five survivability factors" according to managing editor for interest. co.nz Bernard Hickey.

The five factors he sees as the company's strength are their diversified lending, diversified funding, a strong backer, strong New Zealand bank funding line and an investment grade credit rate of BBB- or better. South Canterbury Finance has a BBB-rating while the other two companies Mr Hickey said have all five "survivability factors"

The only other companies Mr Hickey sees in the same category are UDC with an AA rating and Marac with its BBB- rating.

His chart of the 20 largest existing and failed New Zealand finance companies shows only the top three had survivability factors and a high enough investment grade credit rating, while Hanover Finance managed only one of the five factors, with its credit rating of BB+.

Maurice Matthews, of Matthews Financial Services, said clients were not wanting to invest in the finance company sector.

"People are running scared, and they're tending not to reinvest."

Mr Matthews said finance companies had always offered a margin over and above the banks, which took into account the relative risks, but said people had to make a judgment on whether they were being adequately compensated for the risk they were taking on.

"I'm sure there will be some Hanover money around South Canterbury, but obviously the bulk of South Canterbury money is with the local firm."

Mr Matthews said the volatile market meant that the ultimate aim for investors had changed slightly.

"The return of your capital is paramount now, not the return on your capital."

Stephen McFarlane of One to One Financial Management, said most prudent financial advisers had been unwilling to use finance companies for several months, if not a year or more.

"And there's not a return big enough in the world to put my own money in a finance company today."

The collapse of the various finance companies lent weight to the principle of diversification. Mr McFarlane said some of the people who had invested in finance companies had done so without seeking advice.

"I've come across people in the community who have done it themselves -- one person had $100,000 invested across five different finance companies -- they've all collapsed."

However, Mr McFarlane said it was important to realise that in many of the finance company collapses, the companies were working towards a return to investors, so they should get most, if not all, of their money back.

"Yes, it's bad news, but it's not the worst possible news."

Peter Hayes, from Peter Hayes and Associates, said people were not reinvesting in finance companies.

"Two years ago, even one year ago, things were a little bit busier in that area."

Now he said he would be telling people if they couldn't sleep at night, to leave their money in the bank.

Finance companies still offering Hanover-style returns

Finance companies are still offering high interest rates, despite a string of failures in the sector leaving $3.3 billion owed to investors.

Last week, the Weekend Herald's table of finance companies showed Hanover Finance was offering investors a year deposit rate of 10.05 per cent and a three-year deposit rate of 10.80 per cent.

Hanover then became the 25th finance company to crash when it froze repayments on $544 million of investors' funds on Wednesday.

The latest figures released by interest.co.nz show a further 10 finance companies are offering term deposit rates of 10 to 13 per cent.

Sharebroker Chris Lee, managing director of Projects Resources, said there were some high-risk companies still lending and "it just doesn't make sense to put your money there".

But he said it was difficult to pull all finance companies under one umbrella.

"The sad thing is the public may end up dragging money out of perfectly good companies for no reason at all other than emotion."

Failed finance companies had either performed "rotten" business, or had fallen under the model of lending long-term and borrowing short-term, he said.

Bernard Hickey of website interest.co.nz said risky finance companies were not offering high enough returns to justify the investment.

This came down to a "chicken and egg" situation: risky finance companies were reluctant to offer high interest rates because investors would think it must be too risky and would put their money elsewhere, Mr Hickey said.

Mr Lee agreed and said an investor putting money into a low-rated company offering 12 per cent interest took a significant risk.

"If you can get 8 per cent from the banks and 10 from a good finance company with a proper credit rating, then a company with not as high a rating should be rewarding investors with a much higher rate."

Only four New Zealand finance companies sport a credit rating: UDC Finance, Marac Finance, South Canterbury Finance and Equitable Mortgages.

A credit rating is a formal assessment by an independent credit rating firm where analysts investigate the company, assess the strength of its balance sheet and give it a rating.

The Government intends introducing legislation that will make credit rating necessary for finance companies. Until then, investors will have to do their own research.

The only problem, according to Mr Lee, is that financial literacy is generally low in New Zealand - many investors do not understand credit ratings or the jargon in investment statements, are guided by television advertising and attracted by media personalities.

He said the market was the worst he had seen it in his 30-year career and his greatest advice to investors was never to put more than 10 per cent of their money into a company.

Market Chatter -- Corporate finance press digest

LONDON, July 25 (Reuters) - The following corporate finance-related stories involving U.S. and European companies were reported by media on Friday.

U.S. investment bank JP Morgan (JPM.N: Quote, Profile, Research) and National Australia Bank (NAB.AX: Quote, Profile, Research) have held talks about forming a consortium to break up British bank HBOS (HBOS.L: Quote, Profile, Research), the UK's Telegraph newspaper reported.

Two private equity firms are considering investments in BankUnited Financial Corp (BKUNA.O: Quote, Profile, Research), weighed down by a huge portfolio of adjustable-rate mortgages, the Wall Street Journal said on Friday, citing people familiar with the situation.

For Deals of the Day, click on [nSP344109] (Reporting by Douwe Miedema; Editing by Louise Ireland, Paul Bolding)

Property Finance Deals

CapitalSource Healthcare REIT in Chevy Chase, MD, intends to file a registration statement with the Securities and Exchange Commission within the next 30 days for the initial public offering of CapitalSource Healthcare REIT's common shares. The initial public offering of common shares in CapitalSource Healthcare REIT is expected to raise at least $300 million for CapitalSource. The REIT will invest in income producing health care-related facilities, principally long-term skilled nursing facilities, through triple-net lease structures.

Digital Realty Trust Inc. in San Francisco plans to sell 5 million shares of its common stock in an underwritten public offering. Digital Realty intends to utilize the net proceeds from the offering to temporarily repay all or a portion of its borrowings under its revolving credit facility, to acquire additional properties, to fund development and redevelopment opportunities and for general corporate purposes. Separately, Digital Piscataway LLC, an indirect subsidiary entered into an $80 million secured mortgage financing with respect to 3 Corporate Place in Piscataway, NNJ. The loan bears interest at 6.72% per year, matures on Aug. 1, 2011, and is subject to two one-year extensions.

Deka Bank provided a $90 million acquisition loan and Fillmore Capital Partners a $50 million mezzanine loan for the recently opened Renaissance Boston Waterfront Hotel in Boston's vibrant Seaport District. HFF senior managing directors Riaz Cassum and Michael Tepedino (HFF New York), along with director Greg LaBine, arranged the financing for Loeb Partners Realty. Loeb Realty Partners is a privately held real estate company with a current portfolio of more than 15 million square feet of income producing real estate.

Freddie Mac provided senior mortgage acquisition financing of $46 million for The Park at Kingsview Apartments, a 326-unit multifamily complex in Germantown, MD. Financing was based on a 7-year term. The financing amounted to 70% of the cost for the borrower, which consists of a local partner and an offshore investor. Freddie Mac went from application to close in 18 days a deal fell through with another lender. Christopher Feeley, senior vice president and managing director, Gary McGlynn, senior vice president and managing director, and Frank Relihan, vice president of NorthMarq Capital Inc.'s (NorthMarq) Washington, DC Regional office arranged the financing.

Aviva Capital Management provided $21.61 million of financing at a permanent fixed rate of 5.35% for Powerline Business Park. The loan term is five years with a 30-year amortization, and a loan-to-value of 50%. The industrial park has two locations, totaling 395,720 square feet, at 4100 N. Powerline Road in Pompano Beach, FL, and 6601 Lyons Road in Coconut Creek, FL. Marshall Smith, executive vice president for Thomas D. Wood and Company, arranged the financing.

Grosvenor Investment Management US Inc., on behalf of a pension fund it advises, provided first mortgage financing of $7.5 million for 610 Business Park in Brooklyn Park, MN. Financing for the 78,190-square-foot single-tenant industrial property was based on a 10-year term with a 30-year amortization schedule and was arranged for through NorthMarq Capital Inc.'s (NorthMarq) Minneapolis Regional office. Patrick Minea, senior vice president and managing director arranged the deal.

Minnesota Life Insurance Co. provided $6 million in financing for Regent Properties at a permanent fixed rate of 6%. The loan term is 10 years with a 30-year amortization, and a loan-to-value of 59%. The 348,773-square-foot industrial building was built in 1997 and has two locations, 15371 Roosevelt Blvd. in Clearwater, FL, and 11211 69th St. in North, Largo, FL. Marshall Smith, executive vice president for Thomas D. Wood and Company, arranged the financing.

Fifth Third Bank loaned Odyssey Marine Exploration Inc. $2.6 million at a variable interest rate equal to the prime rate plus 0.75% per annum. The loan matures on July 11, 2013, and requires Odyssey to make monthly principal payments in the amount of $10,750 plus accrued interest. The loan is secured by a first mortgage on Odyssey's principal executive offices at 5215 W. Laurel St. in Tampa, FL.

Property Finance (July 20-26): Dealing with 2008 Maturities

Macerich Clears Out Most 2008 Maturities
The Macerich Co. in Santa Monica, CA, closed five major loan financings and a commitment on a sixth financing. The total loan amount on all six transactions is $1.045 billion and the five transactions that recently closed totaled $895 million and generated excess proceeds above the prior loans of approximately $576 million, which were used to pay down the company's maturing line of credit.
Macerich closed on a $100 million financing of The Mall of Victor Valley, a regional mall in Victorville, CA, at an initial rate of 4.32%. Some of the loan proceeds paid off the former loan of approximately $51 million with an interest rate of 5.25%. This floating rate loan has an initial term of three years extendable to five years.
Westside Pavilion, a 740,000-square-foot regional mall in Los Angeles was refinanced with a new $175 million five-year loan with an initial interest rate of 4.45%. Some of the loan proceeds paid off the former loan of $91.6 million with an interest rate of 6.74%.
The company closed on a $150 million loan on the recently opened SanTan Village regional shopping center. The loan has an initial three-year term, extendable to five years. The initial funding was approximately $117 million at an initial interest rate of 4.73%. Approximately $33 million of additional proceeds will be distributed as the remaining construction costs are incurred. Prior to this loan the asset was not encumbered by a mortgage.

A $170 million, 6.76% seven-year fixed-rate loan was placed on Fresno Fashion Fair, a super regional mall in Fresno, CA. A portion of the proceeds was used to pay off the previous loan of $63.1 million bearing interest at 6.52%.
The company placed a $300 million combination construction-permanent loan on The Oaks, a super regional mall in Thousand Oaks, CA. The initial funding was $220 million at an interest rate of 4.29%. Approximately $50 million of additional proceeds will be distributed upon completion of the construction and another $30 million upon stabilization. This floating rate loan has an initial term of three years.
Lastly, the company entered into a commitment for a $150 million, seven-year, 6.11% fixed interest rate loan on Broadway Plaza in Walnut Creek, CA. The loan is expected to close in September and part of the proceeds will be used to pay off the current loan of $59 million (with a 6.68% interest rate). Upon completion of this financing the company will have less than $100 million of remaining maturities for 2008 and expected available capacity under its line of credit of more than $625 million.

Nat Rubin Joins Peak Finance Company as Commercial Loan Officer

Woodland Hills, CA (PRWEB) July 25, 2008 -- Peak Finance Company (http://www.peakfinanceco.com) announced the hiring of its new Commercial Loan Officer, Nat Rubin.

His primary focus will be on promoting lending products that have a unique advantage in the marketplace, as well as delivering the best options for Peak's clientele. "Peak is pleased to have Nat join our team of professionals and we look forward to growth in our commercial loan sector with his experience and guidance," says CEO Eli Tene. "We feel that with our extensive product offerings, business will continue to grow despite the current credit crunch, and Nat will become a pivotal part of that growth. Peak has been able to adapt and excel in turbulent conditions by adopting a flexible and forward looking strategy."

Rubin comes to Peak Finance from Meridian Capital Group, where he served as one of the firm's leading Commercial Finance Officers. With expertise in loan underwriting, negotiations, legal administration, and a vast network of premium clients across the globe, Rubin will be an invaluable member of the Peak team of professionals. Prior to Meridian Capital Group, Nat worked as a legal administrator for American Stock Transfer and Trust Co. of New York.

Creating more options for clients as well as improving the end user's experience is evident in the plans Rubin is developing. With his extensive experience, Rubin was drawn to Peak's integrity, diversity of services, and its creativity in making deals work. "Peak was appealing because they are a unique group of affiliate companies that presented tremendous continual growth despite what the economy and specifically the real estate market is experiencing today." says Rubin. "Peak's long-term investor relationships and private money resources allow the company to offer one of the widest arrays of products in the industry, giving us unparalleled advantage."

Peak Finance Company is a commercial mortgage company that provides mortgage banking services and an array of competitively priced mortgage programs. Not only is Peak Finance a mortgage broker, but it is a direct lender that customizes beneficial programs depending on each clients' individual needs.

ArthaMoney to open finance services centres

Leading financial service provider ArthaMoney today announced that it would open new centres across Chennai, Andhra Pradesh, Karnataka, Delhi and Mumbai to provide services in the areas of investments, real estate, insurance and loans. The company would establish six centres across Chennai city, company Managing Director and CEO Suresh Rangarajan told reporters here.
Each centre will cost us Rs 20 lakh, which will offer the financial need for customers in the area of investments like equity, mutual funds, real estate, to life and general insurance, loans and cards to services like tax filing, bill payments and foreign exchange", he added. Rangarajan said that the company has set itself a target of acquiring one lakh customers at the end of this fiscal.

He said the company also plans to open five branches each in Andhra Pradesh, Karnataka, Delhi and Mumbai by next year.

Pound hurt by worsening public finances

The pound was dented Friday by a steep deterioration in UK public finances.

The office for National Statistics revealed that public sector net borrowing, the government's preferred measure of the public finances, stood at 9.2 billion pounds, way ahead of last year's equivalent 6.3 billion and analysts' expectations for a 7.5 billion pound shortfall.

The deficit in June is the highest for the month, traditionally a deficit month, since records began in 1993.

Chancellor of the Exchequer Alistair Darling is now looking increasingly unlikely to meet his fiscal targets for the year with the news that the UK recorded its biggest monthly deficit for June and debt levels are near to breaching the government's self-imposed ceiling.

Additionally, a newspaper report that the Treasury may revise its self-imposed borrowing limits also dented the pound.

This could effectively give it more leeway to increase borrowing as a way of mitigating the effects of anticipated economic slowdown.

Elsewhere, the dollar remained relatively firm against the euro after Citigroup reported a smaller-than-expected second-quarter loss.

Get a Secure Citizens Auto Finance

The Citizens Auto Finance, is one of the United States leading financial instituions. Today Citizens Auto Finance car loans come in a multitude of different sorts and so makes it much easier for customers to buy a vehicle. The Citizens Auto Finance can be used to purchase yourself either a new or used vehicle for refinancing or for even a lease buyout. Also the process that they go about using for applying for one of their car loans is an extremely easy and simple to do one and if you want you can even apply for vehicle loan online.

In order to apply for a car loan with the National Auto Finance the potential buyer needs to be able to provide certian personal information. This can either be in provided in the form of online or directly at one of their branches across the United States. However, during this articles we're going to look more closely at how the online application works.

Apply for Instant Auto Loans Online

Unsecured auto loans online do not require any sort of collateral, which makes the loan a risk free option for the borrower. The lender however, may end up asking for proof of your annual income and your overall financial position to be certain that payment capacity for the borrower is up to their standards. The loan is then offered at a higher rate of interest with smaller amounts of time for the payment duration. So the unsecured loan is clearly best suited for buying a low priced automobile.
In the case of having bad credit, you can still get yourself an immediate car loan online without having too many worries. Just be sure to show the lender that you seriously intend on paying back the loan in a timely manner. Show him your monthly payment capacity in the form of your annual income or your financial profile and be ready for a sound payment plan.

Get a Guaranteed Car Loans Online

Guaranteed auto loan applications alleviate the stress and hassle. Now potential buyers are able to choose to submit one application through an online car loan broker. This broker will then match the applicants with the best possible lending solutions. Then, the lenders will provide a quote the shows the loan term, the interest rate, and other details pertaining to said loan. After reviewing the quotes, the potential buyer can then select the best possible offer.

National Auto Loan

Getting a good car loan rate from a national auto finance lender is not at all luck, but rather a skill that you should learn. There are good car loan rates available to you if you know the tricks of the trade and how to negotiate the best possible deal for yourself. Remember, you shouldn't be afraid or nervous when trying to negotiate for a loan from a national auto loan lender because you're going to be saving yourself money in the process. That should give the courage and motivation that you need to get the best possible car loan rate available. Follow these easy suggestions in order to guide yourself in buying a new vehicle and negotiating your car loan rate of interest.

General Financial Advice

Before entering our site here are some finance tips which you may find useful in helping you achieve your financial goals.

Pay yourself first. Invest at least 10% of your income in consumer debt repayment or in some type of investment account. To make real financial progress you must reduce your liabilities and increase you assets.

Establish specific written financial goals. Set short term, medium term and long term objectives for yourself and your family. Review and update your goals regularly, no less than annually.

Make a realistic spending plan and use it. You must plan how your income will be used or someone else will! Track your expenditures using receipts, a notebook, or whatever is convenient for you.

Learn about the different types of insurance available. Buy only what you need to cover a specific risk. Increase deductibles to the highest amount you can afford.

Stay current with your finances by reading regularly, taking courses and working with your own personal financial coach. If you've heard all of this before but haven't acted on it, now is the time to move forward! Remember knowledge without action is ultimately the same as not knowing.

Citizens Auto Finance

Even though Citizen Auto Finance does not charge you an application fee for their car loans they do however charge you one hundred dollars for the preparation of the car loan documents. Also a potential buyer now will have the option with Citizen Auto finance car loans to refinance their existing loan. What ends up being important though is that you are able to check and make sure that the car that you wish to purchase can be covered by Citizens Auto Finance car loans as they do not always provide loans in certain cases or for particular makes of vehicles.

Bad Credit Auto Financing - Used Car Loans Refinancing

Low Rate Auto Finance for People with Bad Credit

Auto Finance, Car Loans, bad credit auto financing, new car finance, used car finance, auto refinancing and motorcycle financing loan at lowest interest rate. Get your auto financing loan in minutes by filling up free car finance application form at Car Loan Company. Most of applicants here are approved.

Used Car Finance

With the immense popularity of the World Wide Web in recent years, many people have found that they are able to obtain new and used automobile financing for far better auto loan rates than they were previously able to get a traditional car dealerships and through traditional automobile lending. Whereas when a person shops for a car, truck, SUV, or van loan in their local market they are only going to lenders that have to compete with the local market.

Auto Refinancing

There are several reasons that someone may refinance their automobile loan. The first reason is that they may have had first credit when they got the automobile loan. In the years since they got their automobile loan, they have worked hard and have been diligent enough to bring their credit rating to a more positive standing.

Compare Car Loan Rates

People often apply for a loan without properly considering what difference the rate of interest makes, they will often take the first loan offered to them, without a thought as to, if they could have saved money by shopping around, it is essential to compare car loan rates.

There are basically two parts of a car loan. The first part is the length of time that the loan is over, usually from one to five years, and secondly, the interest rate, even in a very small difference in the rate of interest over dozens of payments, can make a big increase in the amount you have paid for the car, in total.

Before you apply for a loan, you need to be very clear in your own mind, exactly how much you can afford to pay each month. This amount should be reasonable, and should not stretch your monthly budget. With this in mind you should also pay the maximum you can each month, over the shortest period.

It is also essential that you compare car finance rates, therefore, you need to get more than one quote, if possible obtain several quotes, a competent loan officer should have no problem obtaining a handful of comparisons, for you to take a look through.

If possible, payoff the loan in the shortest available time, which is usually 12 monthly payments. This will save a very large amount of money, compared to five years or 60 monthly payments. This is because every month the loan is not repaid, there is additional interest.

Most people cannot afford to pay off a loan within a year, but you should strive to make the payments in the shortest possible time, two or three years would be ideal. Once you get up to four or five year, payment plans, the total interest you are paying can be large amount of the total cost of the vehicle.

Car finance

There happens to be a lot of different things that people do no understand when it comes to getting yourself a new vehicle whether it is through leasing it or buying it, it still requires some information to know how it really does work. The thing that you should keep in mind the most is that a car dealership does not typically finance a car or a loan but in turn they will most definitely have some sort of impact on how much you will end up paying on your car financing.

One good thing to keep in mind is that a car dealership will always sell you a vehicle for cash in hand. These people are third party businesses that have purchased a franchise from one or multiple different car makers in order to sell the vehicles. They do not work for these car makers and always work for themselves. It is important to realize that the dealers buy these cars themselves usually through the use of a very large loan through a bank or another type of financial institution and as a result they are also charged rates of interest on these car loans. They then need to sell the cars off in order to pay off their initial loans as well as all of the other associated costs that come with running a car dealership.
Dealers will always get cash for a vehicle that they sell to someone, it could either come from the consumer himself, or some other financial institution that has loaned out the finances to a consumer in order to purchase the vehicle of their choice through an auto loan. People are usually under the misconception that they will be able to get a discount or a better deal if they pay for a vehicle in cash but this is not the case because they in fact will make more from raised interest rates and commissions if you go about financing the vehicle itself.
When a car dealership sells a vehicle to a consumer he will usually push onto them the typical bank or financial institution that they have working with them in order to get their financing settled. A lot of these dealerships will use some of the more well known and major financial institutions that have special deals with the car makers if you do not already have one and you would be paying an additional premium for that luxury. As a consumer however, you have the ability to bring on your own auto financing company if you would like to. The point of stating this is to make it perfectly clear to you that a car dealership does not finance a loan to a consumer at all. They will not process the loans or even take payments on the loans themselves, all they will do is take the application papers that you fill out and will try to arrange some sort of financing with companies that they usually work with for a small fee.

Calls for action to be taken against Hanover Finance’s directors

There are calls for legal action to be taken against the directors of Hanover Finance, two of New Zealand’s richest men.

The Commerce Commission is now investigating whether the company misled investors with its advertising and promotional material.24 hours ago the finance company froze repayments to its more than 16,000 investors.

The Advertising Standards Authority called their ad "grossly misleading" for saying they were ‘able to withstand any conditions.’Hanover Finance has not been able to withstand the current economic conditions and many were caught by surprise when it froze repayments yesterday, including the voice and face of the company.

Former TVNZ newsreader Richard Long says he hopes it was not just him who influenced people to invest their money in the company.

“I would have hoped that nobody invested in anything because i recommended them my background is in news I was juts there to draw attention to the product,” says Long.

A "product" that one investor, who doesn't want his surname known, put his family's life savings in.“We only have one part time wage coming in, and the interest from Hanover is part of our annual salary,” he says.Many believe Hanover was too focused on loans to property developers.

90 percent of loans were made to just 17 companies - many associated with Hanover owners, Eric Watson and Mark Hotchin.“So you only need one small development to fall over with one developer and you start a domino effect,” says Bruce Sheppard from the Shareholders Association.

Now, if the owners aren't prepared to inject their own cash into the company, the next best thing for bond holders is receivership.

The pair has paid themselves tens of millions in dividends over the years. The spokeswoman for "exposing unacceptable financial advice" says they need to be held accountable.“I think at this point in time their needs to be an investigation from the state, not from the investors the investors don't have the resources to investigate this,” says Suzanne

Nobody from the company was prepared to speak on camera saying they are focused on coming up with a restructure plan. Long says he went in with "his eyes open and has confidence in the company and management they are doing the prudent thing.”

General Electric reorganizes into 4 major units

General Electric Co., which owns businesses ranging from light bulbs to NBC television, on Friday said it will restructure into four businesses from six, a move that Chief Executive Officer Jeff Immelt says will focus the company on growth.

Immelt has been under pressure to shake up GE since it shocked investors with disappointing first-quarter earnings. GE's share price has since dropped nearly 22 percent.

Friday's move follows GE's recent plan to consider spinning off its iconic lighting and appliance businesses, a brand familiar to Americans for generations.

The new structure includes GE Technology Infrastructure, led by Vice Chairman John Rice, which includes Healthcare, Aviation, Transportation and Enterprise Solutions.

GE Energy Infrastructure, headed up by John Krenicki, includes Energy, Oil & Gas and Water.

GE Capital, led by Vice Chairman Mike Neal, brings together all the financial service businesses, including Commercial Finance, GE Money, industry verticals and Corporate Treasury.

NBC Universal, headed by Jeff Zucker, will remain unchanged.

In the reorganization, GE's Commercial Finance, GE Money, GE Industrial and GE Healthcare were folded into new, expanded business segments.

Analyst Nicholas Heymann of Sterne Agee in New York said in an e-mail that GE made the right move, and that the new structure suggested GE would be focusing increasingly on infrastructure and, to a lesser extent, on commericial finance.

The expected sale of GE Money at a favorable price "should further underscore GE's narrowing focus of its businesses," Heymann said. Immelt has said GE will consider selling portions of GE Money, which provides banking and credit services.

GE, which is based in Fairfield, has been getting rid of other units that have failed to drive profitability. It announced in May it would sell or spin off its appliance business, but this month said it would spin off the entire unit that includes household appliances such as dishwashers and clothes dryers and lighting, motors and electrical distribution.

Last year, GE shed its underperforming plastics business by selling it to a Saudi Arabian company for $11.6 billion.

Analyst Matt Collins of Edward Jones in St. Louis said investors will benefit from the reorganization if it helps GE officials focus on key markets and provides more transparency.

In particular, he said organizing GE's array of financial services into one unit makes it a "little easier to figure out where the financial earnings are coming from," he said. "That's overdue."

The reorganization is GE's second announcement in a week. On Tuesday, GE said it had formed a joint venture with an Abu Dhabi government investment company that will pump $4 billion of outside capital into its weakened commercial finance business. The deal with Mubadala Development Co. also will launch or broaden several other ventures with the Persian Gulf investment vehicle, which expects to become one of the top 10 institutional investors in GE.

Immelt also announced that GE's board has named Krenicki, 46, a 24-year GE veteran, as a vice chairman of GE.