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Strategies & Market Trends : IJNT Breaking out, Rumor has it Huge Deal in the Works -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (28)	8/17/1999 4:54:00 PM
From: 2MAR$	Read Replies (1) \| Respond to of 36

From Raging Bull on financing deal, of interest: waho Reply To: None Tuesday, 17 Aug 1999 at 3:37 PM EDT Post # of 817 Strategic Nortel Financing Coup >>>>I was in technology finance and leasing w/GE Capital 10 yrs+ (lrgst customer Sprint, gross financing over $250 million). Credit requirements vary, but in general a co. must have 4 times tangible net worth of the financed amount to obtain loan committee approval. In IJNT's case, their net worth should be a minimum of $148 million to qualify for their $37 million financing. In some cases a manufacturer's captive finance co. will provide financing and ignore the credit requirements just to get their parent the equipment sale. Speaking from experience, (GE Capital purchased Northern Telecom Finance a few yrs back), companies w/ the scale of IBM Credit Corp and GE/Nortel DO NOT take the credit risk just to make a sale. In addition, Nortel is providing IJNT w/ "...$7 million in operating capital, to be repaid form future public equity fundraising by the Co." Nortel is not only financing their equipment, but they are also making an investment in IJNT' business. I do not know what Nortel knows, BUT they did not get to be a $5.4 Billion company by advancing $37 million, unless their due diligence was iron clad, and as the world's premier telecom mfgr --- Who knows this market better?