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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 10 4:00 PM EST

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To: Casaubon who wrote (47688)	4/22/2000 10:55:00 AM
From: Benkea	Read Replies (2) of 99985

From good ole Barton Biggs on the topic of drastically reduced capital expenditures on net infrastructure owing to shut off of the capital spicket for anything just because it sports a .com after its name: "more worrying, perhaps, is that a big part of this infrastructure equipment is vendor-financed. In a recent research note, Morgan Stanley's Barton Biggs said he's been hearing that Cisco will give some of its customers nine-year notes on some of its equipment with no interest or repayment during the first three years. Biggs says some people at the company have acknowledged to him that a good portion of this equipment will be obsolete in three years. We called one of Cisco's customers, ICG Communications...and the company spokeswoman acknowledged that ICG had a commitment from CSCO for up to $180 million in vendor financing over a multiyear period. (Asked exactly how many years, an ICG spokeswoman told us she couldn't disclose that information, under terms of the contract with Cisco.) So, how much of Cisco's business is financed this way? Biggs says he thinks it's somewhere in the neighborhood of 20%."

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