NTL to Miss Payment on Bonds in What May Be Europe's Biggest Junk Default
NTL Inc., a cable television company that posted the biggest quarterly loss in U.K. history, failed to pay interest on $1.3 billion of bonds, a step toward what may be Europe's biggest junk bond default.
The fun part NTL used to be a $109 stock, now it trades for 16 cents... You gotta love stuff like this...
NTL withheld about $74.2 million in interest payments at the request of an unofficial bondholders committee representing half the company's debt. The U.K.'s biggest cable provider, with $17.5 billion in debt and a $44 million market value, may go out of business, said Chief Executive Officer Barclay Knapp. Customers have complained about poor service amid slowing growth as the company struggles to make its debt payments.
Some ``bondholders will say, `Don't make the payment, keep the capital in the company,''' said Tom Haag, who manages high- yield bonds at Lutheran Brotherhood Inc., which owns NTL's Diamond Cable bonds.
NTL could surpass United Pan-Europe Communications NV as Europe's biggest default so far. The Dutch firm seeks to convert 6 billion euros of bonds, or $5.3 billion, into new shares.
Enron Corp.'s $9.9 billion corporate-bond default was the biggest ever, said David Hamilton, a Moody's default analyst. The size of NTL's default hasn't been determined, Hamilton said. |
