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To: William F. Wager, Jr. who wrote (48)	11/3/1999 5:42:00 PM
From: William F. Wager, Jr.	Read Replies (1) \| Respond to of 60

DJ VoiceStream Wireless $1.5 Bln Junk Deal's A Soft "Cell" Novenber 3, 1999 By Pallavi Gogoi and Jennifer Ablan NEW YORK (Dow Jones)--If the wireless sector is hot in the equity and junk bond markets, VoiceStream Wireless Corp. (VSTR) is on fire. Equity investors this year have enjoyed a six-fold increase in the stock price of the Bellevue, Wash.-based wireless telecommunications company, which went up from a low of 16 3/8 to hit 102 15/16 this week. Now, bond investors have a chance to participate in what they hope will be a similar upside. Interest for a jumbo junk bond offering from VoiceStream has been so wide and deep that the deal has been increased in size to $1.5 billion from an initially shopped $1 billion. "The wireless sector is guaranteed to grow into its full capacity," said Prescott Crocker, a high-yield portfolio manager at Evergreen Funds in Boston, who plans to buy a piece from both portions of the two-part offering. "VoiceStream has a fabulous management team and the statistics, in terms of subscribers and margins, are great," he added. VoiceStream's chief executive John Stanton was a co-founder of McCaw Cellular Communications Inc., which telecom pioneer Craig McCaw started and sold to AT&T Corp. (T). Junk bond investors hit pay dirt on that deal. In June, VoiceStream agreed to buy East Coast wireless provider Omnipoint Corp. (OMPT) for about $5.5 billion and recently acquired Aerial Communications Inc. (AERL) for $3 billion. Analysts said the combined VoiceStream/Omnipoint/Aerial company, along with affiliates, will have licenses in at least 23 of the 25 top markets. "The initial appeal in VoiceStream is that it will have a national GSM footprint," said Jim Ballan, high-yield senior analyst in wireless and a director at CIBC World Markets in New York. GSM refers to the global system for mobile communications, which is more widely used in Europe. Analysts pointed out that the GSM technology allows VoiceStream customers to use their telephone overseas, an option not offered by AT&T and Sprint. Analysts See Takeover Play VoiceStream's expansion and special niche could ultimately make it attractive to potential suitors, analysts said. "VoiceStream is a take-out target," said CIBC's Ballan. "And it is a target for an international player who wants a foothold in the U.S," CIBC's Ballan said. For the time being, VoiceStream will compete in the same arena as Sprint PCS Group (PCS), AT&T and Nextel Communications Inc. (NXTL), he added. "VoiceStream will become a big, national GSM wireless telephony play," said Jonathan Savas, telecom analyst at Merrill Lynch & Co. The company is helped, he added, by its "strong sponsorship from Hutchison Whampoa." Conglomerate Hutchison Whampoa owns 24% of VoiceStream. Lead managed by Goldman Sachs & Co., the $1.5 billion offering - expected to price Thursday - could be last jumbo junk bond deal of the year, said Tom Price, high-yield portfolio manager at Strong Funds in Milwaukee. "The large size of the deal means that it will offer a lot of liquidity and that is attracting a lot of buyers," added Merrill's Savas. The deal will come in two parts. Price talk on its 10-year senior notes suggests a yield of 10.375% to 10.625%. Its 10-year senior discount notes - with a five-year zero coupon - are expected to price at a spread of 125 basis points over the cash pay notes. Pallavi Gogoi and Jennifer Ablan; Dow Jones Newswires; 201-938-2047; jennifer.ablan@dowjones.com --Bill