Jamie S. Miller Senior Vice President and Controller   General Electric Capital Corporation 3135 Easton Turnpike Fairfield, CT 06828 USA   T+1 203 373-2444 F+1 203 373-3757 jamie.miller@ge.com

 

Via FedEx and EDGAR

October 21, 2008

Mr. Mike Volley

Senior Accountant

United States Securities and Exchange Commission

100 F Street, NE

Washington, D.C.  20549

Re: General Electric Capital Corporation

Form 10-Q for the Quarterly Period Ended March 31, 2008

Filed February 20, 2008

File No. 001-06461

Dear Mr. Volley:

We are responding to your comment letter dated June 23, 2008, to Keith Sherin, Chief Financial Officer of General Electric Capital Corporation (“GECC” or the “Company”) and our recent telephone conversations relating to the above document.

Pursuant to those conversations, we will expand the disclosure in our third quarter Form 10-Q as discussed with you. The following excerpt is consistent with that discussion. We have highlighted (in bold type) changes from our second quarter Form 10-Q disclosure.

Investments in debt and equity securities

When available, we use quoted market prices to determine the fair value of investment securities, and they are included in Level 1.

When quoted market prices are unobservable, we use quotes from independent pricing vendors based on recent trading activity and other relevant information including market interest rate curves, referenced credit spreads and estimated prepayment rates where applicable. These investments are included in Level 2 and primarily comprise our portfolio of corporate fixed income, government, mortgage and asset-backed securities. In infrequent circumstances, our pricing vendors may provide us with valuations that are based on significant unobservable inputs, and in those circumstances we classify the investment securities in Level 3.

As part of our adoption of SFAS 157 in the first quarter of 2008, we conducted a review of our primary pricing vendor, with the assistance of an accounting firm, to validate that the inputs used in that vendor’s pricing process are deemed to be market observable as defined in the standard. More specifically, we used a combination of approaches to validate that the process used by the pricing vendor is consistent with the requirements of the standard and that the levels assigned to these valuations are reasonable. While we were not provided access to proprietary models of the vendor, our review included on-site walk-throughs of the pricing process, methodologies and control procedures for each asset class for which prices are provided. Our review also included an examination of the underlying inputs and assumptions for a sample of individual securities, a process we have continued to perform for each reporting period. Based on this examination, and the ongoing review performed, we believe that the valuations used in our financial statements are reasonable and are appropriately classified in the fair value hierarchy. As of September 30, 2008, $X million and $X million were classified in Level 1 and Level 2, respectively. The valuations provided by pricing services based on significant unobservable inputs was insignificant and those investment securities are classified as Level 3.

Retained interests in securitizations are valued using a discounted cash flow model that considers the underlying structure of the securitization and estimated net credit exposure, prepayment assumptions, discount rates and expected life. Investment securities priced using non-binding broker quotes and retained interests are included in Level 3. We use non-binding broker quotes as our primary basis for valuation when there is limited, or no, relevant market activity for a specific instrument or for other instruments that share similar characteristics. We have not adjusted the prices we have obtained. Level 3 investment securities valued using non-binding broker quotes totaled $X million at September 30, 2008, and were classified as available-for-sale securities.

We receive one quote for Level 2 and Level 3 securities where third-party quotes are used as our basis for fair value measurement. As is the case with our primary pricing vendor, third-party providers of quotes do not provide us access to their proprietary valuation models, inputs and assumptions. Accordingly, our risk management personnel conduct internal reviews of pricing for all such investment securities at least quarterly to ensure reasonability of valuations used in our financial statements. These reviews are designed to identify prices that appear stale, those that have changed significantly from prior valuations, and other anomalies that may indicate that a price may not be accurate. We also follow established routines for reviewing and reconfirming valuations with the pricing provider, if deemed appropriate. In addition, the pricing vendor has an established challenge process in place for all security valuations, which facilitates identification and resolution of potentially erroneous prices. Based on the information available, we believe that the fair values provided by the brokers are consistent with the principles of SFAS 157.

Private equity investments held in investment company affiliates are initially valued at cost. Valuations are reviewed at the end of each quarter utilizing available market data to determine whether or not any fair value adjustments are necessary. Such market data include any comparable public company trading multiples. Unobservable inputs include company-specific fundamentals and other third party transactions in that security. Our valuation methodology for private equity investments is applied consistently and these investments are generally included in Level 3.

In connection with responding to your comments, we acknowledge that:

·   the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

·   Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and

·   the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Should you have any questions regarding this matter, please contact me.

GENERAL ELECTRIC CAPITAL CORPORATION

/s/ Jamie S. Miller

Jamie S. Miller

Senior Vice President and Controller

cc: J. R. Immelt, Chairman of the Board and Chief Executive Officer, General Electric Company and Chief Executive Officer, General Electric Capital Corporation

K. S. Sherin, Vice Chairman and Chief Financial Officer, General Electric Company

D. A. Warner, III, Chairman, General Electric Company Audit Committee

B. B. Denniston, Senior Vice President and General Counsel, General Electric Company

M. R. McAlevey, Vice President and Chief Corporate, Securities and Finance Counsel; Chairman, Disclosure Committee, General Electric Company

F. Casal, Partner, KPMG LLP