WCOM Message Board - Msg: 17631720

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Technology Stocks : WCOM

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To: Oeconomicus who wrote (10685)	6/20/2002 5:30:32 PM
From: tejek	of 11568

It's a little of both, really. For the mega-banks like BofA, the legal limits are quite high, but even if they can underwrite a billion or more of a syndication, they would probably sell it down to a few hundred million if they can. BT used to sell deals down to almost nothing - though that generally pissed off the participant banks. Besides, it makes good business sense. If you are one of several banks doing business with a large client, you may not like it but you are pretty much forced to help them out in a credit crunch or a need for equity. So if you can spread the risk among several banks what bank would object. After all, they read about all the credit watches and downgrades just like we do. I also don't believe the consortium would permit accts receivable to be a part of the $5 billion. Accts. receivable are only slightly better than an IOU. The only thing that can derail WCOM's train is a flat out no from the banks. If that happens, the company would lose almost all credibility and the party would be over. I think that's why Ebbers was kicked out......the banks wouldn't go forward with him in place. ted

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