What do the banks really face...Smoke and Mirror (IMO)
from latest 10-Q
As of March 31, 2002, our total debt was $30.2 billion and we had available liquidity of $10.2 billion under our credit facilities, which are described in our Annual Report on Form 10-K for the year ended December 31, 2001, and from available cash.
As of January 1, 2001, the MCI group was notionally allocated $6.0 billion of WorldCom's debt and the remaining outstanding debt was notionally allocated to the WorldCom group. WorldCom management has a wide degree of discretion over the cash management policies of both the WorldCom group and the MCI group. Cash generated by either group can be transferred to the other group without prior approval of WorldCom's shareholders. Due to the discretion possessed by management over the cash management policies of both groups, including the timing and decision of whether to finance capital expenditures, it may be difficult to assess each group's liquidity and capital resource needs, and, in turn, the future prospects of each group based on past performance.
For the first quarter of 2002, the MCI group generated sufficient cash to pay $71 million for dividends on MCI group stock and to repay $9 million of its allocated notional debt.
As of March 31, 2002, we had no amounts drawn against our credit facilities which include the following:
o $1.6 billion revolving credit facility that expires June 8, 2006;
o $2.65 billion 364-day revolving credit facility that expires June 7, 2002 with a one-year conversion feature; and
o $3.75 billion revolving credit facility that expires June 30, 2002.
We intend to replace our $2.65 billion 364-day revolving credit facility and we do not intend to renew the $3.75 billion revolving credit facility.
Additionally, we are working with our banking group to increase the size of our facilities in exchange for security. These negotiations, if successfully completed, will result in $5.0 billion or more of availability under credit facilities which would mature between 2005 - 2006.
We remain on schedule in these negotiations and expect to complete the process over the next few weeks. It is anticipated that in the interim, we will draw against the $2.65 billion revolving credit facility in order to preserve the one-year conversion feature on the facility. However, it is intended that the amounts drawn under the $2.65 billion revolving credit facility will be repaid upon completion of the new credit facility agreements.
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Geeesh! |
