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Technology Stocks : PCW - Pacific Century CyberWorks Limited
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To: pennywise who started this subject7/18/2001 5:29:53 PM
From: ms.smartest.person   of 2248
 
PCCW drops plans to sell 30-year bonds

By Rahul Jacob in Hong Kong - Jul 18 2001 17:47:23

Pacific Century Cyberworks, the Hong Kong telecommunications company, is dropping plans to sell 30-year bonds that were part of a US$2.5bn bond issue currently being marketed to investors.

It blamed volatile market conditions resulting from nervousness over economic turmoil in Argentina.

PCCW is believed to be offering 10-year bonds at a spread to US Treasuries of equivalent maturity of 312.5 basis points, higher than the 280 basis points over Treasuries estimated by some observers as the roadshow kicked off.

Bankers said the spread premium wanted by investors for the 30-year bond was more than the company was prepared to pay.

Jason Carley, head of fixed-income research at Merrill Lynch, said the yield spread over Treasuries was not a surprise when PCCW's bond offering was compared with bonds of other regional telecom companies.

"Telekom Malaysia is trading at 280 basis points over Treasuries and its credit profile is more stable," said Mr Carley.

He cited the weaker financial profile of PCCW, which is the parent of PCCW-HKT, the entity issuing the bonds, as one reason investors would demand premium to its regional peers. The company's interest costs are estimated to rise 39 per cent in the financial year ending March 2002, Merrill said.
news.ft.com
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