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Technology Stocks : Global Crossing - GX (formerly GBLX)
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To: Boplicity who wrote (2598)10/12/1999 11:52:00 AM
From: AurumRabosa  Read Replies (2) of 15615
 
S&P may cut Global Crossing Ltd

NEW YORK, Oct 12 - Standard & Poor's today placed its ratings on Global Crossing Ltd. and subsidiaries on CreditWatch with negative implications.

The CreditWatch placement follows the Oct. 11, 1999, announcement that Global Crossing plans to acquire RACAL Electronics PLC for about $1.6 billion.

Global Crossing will fund the transaction with a credit facility of about $1.1 billion that will be secured by RACAL assets. The remaining $0.5 billion will come from Global Crossing's existing credit facilities.

Standard & Poor's had expected Global Crossing to continue to expand its international network.

However, the large amount of debt being used to acquire RACAL will place a significant strain on the credit strength of Global Crossing.

Prior to the acquisition announcement, the total debt to earnings before interest, taxes, depreciation, and amortization ratio for Global Crossing was expected to be between 4x and 5x in 1999.

RACAL's network of 4,300 miles of telecommunications cable in the U.K. will advance Global Crossing's plans to build a European terrestrial network that will link to its undersea cable facilities.

To resolve the CreditWatch listing Standard & Poor's will evaluate the RACAL transaction and discuss with Global Crossing management the continued funding of its international growth strategy. RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS
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