Here is something else that may shine some light on how hot this sector is right now.
To: Resry (2243 )
From: Steven Richard
Thursday, Apr 29 1999 9:47PM ET
Reply # of 2332
Sprintbonds show investors keen on telecoms
By Terence Gallagher
NEW YORK, April 29 (Reuters) - Sprint Capital Corp.'s successful sale of $3.5 billion in global bonds on
Thursday highlights investors' voracious appetite for the telecommunications sector, credit market watchers
said.
Huge infrastructure investment needs have sparked telecommunications companies to sell the largest corporate
bond issues ever.
Thursday's issue by Sprint, the third-largest U.S. long-distance company, follows hard on the heels of last
month's record $8 billion debt offering by market leader AT&T Corp. (T - news), which eclipsed the previous
record, last summer's $6.1 billion issue by number-two MCI WorldCom Inc (WCOM - news).
Sprint itself did a $5 billion deal just last November.
''There has been a tremendous amount of debt issuance in this sector. That alone shows how popular these
corporates can be,'' said Robert Schiffman, telecoms debt analyst at Donaldson Lufkin and Jenrette.
Investors, spurred by rapid-fire technological developments and swiftly improving services in
telecommunications, eagerly snapped up all four of those mammoth telecommunications issues, as well as
several recent smaller ones, despite some concerns about oversupply.
''You only have to pick up the newspapers to read that telecom is going to be in the news going forward almost
every day,'' said Bruce Widas, managing director of Warburg Dillon Read, which with Salomon Smith Barney
was co-lead manager of the Sprint deal.
Another sign of investors' readiness to throw money at the telecommunications sector was Wednesday's
announcement that AT&T had lined up $30 billion in financing for its surprise $58 billion bid to acquire
MediaOne Group Inc., the nation's No. 3 cable company.
Sprint received over $7 billion in orders for its three-tranche offering, leading it to increase the size in the final
hours from initial plans for $3 billion.
Proceeds from the new issue will go toward financing negative cash flow at Sprint's PCS wireless service, as
infrastructure spending is outpacing revenues.
Despite the barrage of supply, yield spreads in the sector relative to Treasury yields have not widened
significantly, Schiffman said.
Sprint issued $1.0 billion in five-year notes at a yield 91 basis points over Treasuries, $750 million in 10-years
at 124 basis points over, and $1.75 billion in 20-years at 126 basis points over.
All three Sprint tranches priced at the low end of the range of expected yields, despite a Treasury rally that
shaved about six basis points off the yields on Thursday morning, further proof of strong investor demand.
Widas said Sprint's credit ratings are probably stable at current levels -- Baa1 from Moody's Investors Service
and BBB-plus from Standard & Poor's -- despite having a negative outlook from both of those rating agencies.
''That is something investors have to take into account, but clearly investors are very comfortable with the credit
as evidenced by what we were able to do with the order book here,'' he said.
What does this have to do with MDTV???
HIGH SPEED INTERNET ACCESS.
From my understanding MDTV's High Speed Internet Access is going to be even better than cable.
I am personally going to be signing up with a provider here in Dallas in the next week who provides High Speed Internet Access Via Satellite. They are telling me it is faster and more efficient than cable.
From what I am reading and hearing; that is the direction these telecommunications companies are pursuing.
Budda Boom Budda Bang.
No brainer. |
