July 18 General Electric Co's credit card unit, Synchrony Financial IPO-SYF.N, said it expects to raise up to $3.25 billion in a public offering of shares, in what is expected to be the biggest U.S. IPO by a financial company this year.
The offering of 125 million shares is expected to be priced at between $23 and $26 per share, the company said in a filing with the U.S. Securities and Exchange Commission on Friday. (bit.ly/1nEs3gn)
At the top end of the expected range, the unit will be valued at about $21.6 billion. Bankers had estimated the unit to be worth between $16 billion and $18 billion.
Synchrony filed for a placeholder $100 million IPO in March after GE announced plans in November to spin off the unit and reduce its dependence on its financing arm, GE Capital.
Synchrony said on Friday that prior to the completion of the offering, it will enter into a new bank term loan facility for $8 billion and a $1.5 billion loan facility with a subsidiary of GE.
GE has been reducing its reliance on GE Capital, which at one point accounted for almost half of the company's profit. The unit's rising funding costs during the 2008 financial crisis nearly sank the entire company.
Synchrony is the largest provider of private label credit cards in the United States and said it financed $93.9 billion in 2013.
GE Consumer Finance will see its stake dilute to 85 percent from 100 percent after the offering.
Goldman Sachs & Co, JP Morgan, Citigroup and Morgan Stanley are the lead underwriters for the IPO. (Reporting by Tanya Agrawal; Editing by Saumyadeb Chakrabarty and Maju Samuel)