GE Capital Services, General Electric Co.'s massive finance unit, is planning to structure, price, and lead syndicated loans next year, according to a source at the company.
The $250 billion-asset unit of GE has long participated in the syndicated loan market by buying pieces of deals originated and structured by other lenders. Now the Stamford, Conn., unit wants to compete for mandates to lead large syndicated loans to companies in sectors in which it has expertise.
"We're always expanding the industries in which we operate," the GE Capital source said.
GE Capital would distribute large syndicated loans through GE Capital Markets Services Inc., a trading desk the company founded two years ago to sell and trade assets owned by GE Capital subsidiaries, the source said.
The desk is headed by Steve Kluger.
A spokesman for GE Capital did not return phone calls seeking comment.
But a banker active in the syndications market said he is aware that GE Capital is entering the originations business.
GE Capital would probably look to serve middle-market customers for which it has been unable to syndicate loans, the banker said.
But GE Capital is also a global player and well-capitalized, so its potential for grabbing market share is substantial, the banker added.
GE Capital has 28 subsidiaries that specialize in financing target industries, including real estate, aviation, transportation, aerospace, and mortgages.
These subsidiaries have long originated loans, but the loans have been almost entirely "bilateral," meaning they are usually small, private loans held by GE Capital only.
The company would continue to make these loans while it looks to lead larger, syndicated deals.
This year GE Capital had led five small syndicated deals through Monday, worth a combined $640 million, for a market share of less than 0.1%.
But it has participated in 19 loans worth $7.5 billion-nearly four times its participation in 1996, according to Securities Data Co.
GE Capital's push into originations comes amid an internal shake-up. Gary Wendt, the unit's chief executive, stepped down Dec. 8 and was succeeded by Dennis D. Dammerman, General Electric's chief financial officer.
Mr. Wendt was credited with a global buildup at GE Capital that included several buyouts. Most recently, it bought the equipment and real estate financing units of Metropolitan Life Insurance Co. for an estimated $1 billion.
But Mr. Wendt came under fire for failing to integrate the businesses, a task now left to Mr. Dammerman, who has said he will focus on "eliminating redundancies."
GE Capital contributed 40%, or $3.3 billion, of General Electric's earnings last year.