Pacific Century CyberWorks (PCW, PCWKF) Message Board

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Technology Stocks : Pacific Century CyberWorks (PCW, PCWKF)

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To: ms.smartest.person who wrote (4394)	1/7/2001 10:57:49 PM
From: ms.smartest.person	of 4541

Banks hike rates on PCCW's loan by Stephen Vines Posted 09:00 PM EST, Jan-5-2001 HONG KONG - Hong Kong telecom and Internet company Pacific Century CyberWorks Ltd. is hitting more problems refinancing the $12 billion loan it took out for the purchase last year of Cable & Wireless HKT Ltd. On Friday, the coordinating arrangers for a $4.7 billion loan facility said they were substantially increasing the interest rate margin so as to make the loan more attractive for syndication. In a statement, the five coordinating banks said they were raising the rates "in view of the recent sentiment in relation to the telecommunication companies." As a result, the amount payable on $1.5 billion over three years will rise from 50 to 85 basis points over LIBOR, while the five-year, $2.3 billion tranche will rise from 65 to 115 basis points over LIBOR and the seven-year, $990 million tranche will jump from 80 to 145 basis points over LIBOR. The banks will also charge an additional 10 basis points for any part of the loan paid in Hong Kong dollars. Since the banks agreed to the refinancing at the end of November, the market has been awash with rumors of the difficulties encountered in gaining support for this loan facility. The five coordinating banks are led by BOCI Capital Ltd., a Bank of China unit, and Hongkong and Shanghai Banking Corp. Ltd., a unit of HSBC Holdings plc. They have been joined by Barclays Capital Asia Ltd., Chase Manhattan Asia Ltd. and Mizuho Financial Group, the parent of Fuji Bank. Barclays and Chase have deepened their exposure to PCCW by underwriting a separate $2 billion loan for an Internet protocol backbone joint venture in which PCCW and phone giant Telstra Corp. of Australia are equal partners. PCCW also has an outstanding bridge loan of $9 billion due for repayment on Feb. 27. The deal with Telstra will help it pay the half of this loan that is not covered by the refinancing package. The balance of the $12 billion loan has been found from the cash reserves and from sums inherited as a result of the Cable & Wireless HKT merger. Investor unease over PCCW's ability to service its loan burden are fueling a growing belief that the company will start making asset disposals to shore up its financial position. A Hong Kong-based manager of a leading European investment fund said Friday: "This news is not good. We are still stuck with some CyberWorks equity but will definitely get out as soon as possible." CyberWorks shares closed down 2.9% Friday at HK$5 ($0.64). thedeal.com

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