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To: djane who wrote (6454)	8/12/1999 7:07:00 PM
From: djane	Respond to of 29987

Bloomberg. Junk Bonds: Iridium Bonds Tumble 26 Percent After Loan Default New York, Aug. 12 (Bloomberg) -- Iridium LLC's bonds fell 26 percent after the cash-strapped satellite telephone operator defaulted on a bank loan and took a step closer to bankruptcy. Lenders, led by Chase Manhattan Corp., yesterday declined to extend the deadline for the Washington D.C.-based company to meet conditions of its $800 million syndicated bank loan. Iridium also defaulted on a $750 million loan guaranteed by Motorola Inc., the biggest investor in the 66-satellite network. The banks ``have pulled the rug out from under Iridium,' said Neal Dorflinger, a director at DLS Capital Partners, a Dallas broker-dealer, who recently bought the bonds at about 25 cents on the dollar. He's holding onto the bonds, which he bought to hedge against a short in the stock he owns. Iridium's 14 percent bonds due 2005 fell 6 1/2 points, or $65 per $1,000 bond, traders said. At a price of 18 1/2 cents on the dollar, they've plunged 80 percent since February. The company, which is continuing talks to restructure its debt, could be forced into bankruptcy as soon as next week, said bondholders. The troubles come after a flawed marketing plan and expensive telephones bungled Iridium's efforts to attract enough subscribers and pay its debts. It's expected to miss a $90 million interest payment Aug. 15 on $1.45 billion of bonds. ``We're still hoping for an out-of-court restructuring for the company,' said Dorflinger. ICO Bonds Fell Bonds of ICO Global Communications Ltd., the third of the global satellite-telephone operators after Iridium and Globalstar Telecommunications Ltd., also fell today after the company said it failed to secure new financing. ICO, which raised $120 million in a public share sale last month, said it failed to get $600 million in financing commitments from an unidentified investor group. Its potential is being tarnished by Iridium's problems, investors said. ``I'm just not a fan of the satellite industry,' said George Edwards, who helps manage about $6 billion of high-yield bonds at Prudential Investments in Newark, New Jersey. He once owned Iridium bonds. ICO's 15 percent notes due 2005 fell about 4 points to 46, for a yield of 38.8 percent. They've fallen about 47 percent since they were sold in July 1998. Prices of bonds rated below ``Baa3' by Moody's Investors Service and ``BBB-' by Standard & Poor's rose about 1/4 point today, traders said. Spreads between junk bonds and 10-year Treasuries were little changed at 480 basis points, according to a Merrill Lynch & Co. high-yield bond index. At least 11 companies canceled or delayed $2.5 billion of junk bond sales in the past three weeks, deterred by rising interest rates and lackluster demand.