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Gold/Mining/Energy : Gold Price Monitor

GDXJ 117.61

+3.0%

Dec 19 4:00 PM EST

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To: Jim McMannis who wrote (87371)	6/25/2002 8:04:21 PM
From: Ahda	Read Replies (1) of 116815

Sorry to trouble you but I don't know what a springing lien is. Is there some sort of simple explanation that you or anyone else can give me? Cash on the balance sheet is nearly $6 billion which provides significant short term flexibility. We note that most of these funds are overseas and some may be subject to taxes if repatriated to the US. Motorola recently renegotiated its credit facilities in a reduced amount of $1.8 billion, split evenly between a 3 year and 364 day facility. In addition to traditional financial covenants, these agreements contain a springing lien on domestic inventory and receivables, which would be triggered by a Baa3 rating by Moody's or BBB- rating by S&P, and provide for next day rather than same day committed availability. While the latter clause is mitigated by the significant liquidity, the springing lien would create structural subordination for the public debt which would magnify the impact to public debt of any future downgrade. If its ratings fall to speculative grade, the company would not be able to sell into its accounts receivable financing programs, which provided approximately $350 million in financings at 3/31/02.

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