Despite $2.9 Billion Loss, MCI Worldcom's Gaining Market
Share from Competitors, Analyst Says
American Banker, November 2, 1998
By David Weidner
MCI Worldcom Inc.'s announcement of a $2.9
billion loss for the third quarter should not shake
the bank group that lent the company $12 billion
this year, an analyst said.
Tim Caffrey, a telecommunications loan analyst
with Standard & Poor's Corp., said lenders should
be buoyed by the fact MCI Worldcom continues to
take market share away from competitors,
including AT&T Corp.
He said it was a one-time, merger-related loss that
was "pretty much in line with what we expected.
The good news is that they've got pretty good
growth in the right places."
Mr. Caffrey said he sees the combination of MCI
Communications and Worldcom Inc. showing its
potential as a profit machine that competitors will
find "hard to deal with." Without the merger
expense, the Jackson, Miss., company would
have earned $268 million.
The $12 billion loan package, structured and
syndicated in July, was related to Worldcom's
$45.8 billion acquisition of MCI. It was the biggest
syndicated loan package of the year, though $5
billion of it was a refinancing of a 1997 term loan
to Worldcom.
NationsBank Corp. was lead arranger on the deal,
which included six banks as top-tier investors at
$750 million and a total of 83 investors. The deal
was coupled with the largest corporate bond
issuance in history, a $6.1 billion deal led by
Salomon Smith Barney Inc. on Aug. 6. |
