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Technology Stocks : Winstar Comm. (WCII) -- Ignore unavailable to you. Want to Upgrade?

To: silicon warrior who wrote (11871)	3/23/2000 10:21:00 PM
From: DubM	Read Replies (1) \| Respond to of 12468

More news on the debt sale. Why are they trying to do this at such an inopportune time? Thursday March 23, 7:09 pm Eastern Time US Junk Bonds - Expected Winstar yields leap higher NEW YORK, March 23 (Reuters) - Investors said the torpor beating down the high-yield bond market is punishing Winstar Communications Inc. (NasdaqNM:WCII - news), which now looks like it will have to offer much higher yields to attract investors to its expected Friday sale of about $2.0 billion of 10-year notes. Secondary issues suffered as well on Thursday, traders said, falling one-half to three-quarters of a point. ``We're finishing with a general lack of interest in anything,' said one trader. ``It's dead everywhere.' That looks like it's hurting Winstar's sale. ``Any new issue done right at this moment is going to be challenged, even in the telecommunications sector, and that's being reflected in the price talk for Winstar,' said Charles Ullerich, who helps manage $2.5 billion of high-yield debt for Pilgrim Group in Phoenix. Winstar, a New York-based competitive exchange carrier serving small and medium-size businesses, is expected to privately sell the following debt: -- $300 million of eight-year senior notes yielding about 11.875 to 12.125 percent, up from the 11.25 percent earlier expected; -- $1.0 billion plus 250 million euros ($240 million) of 10-year senior notes yielding about 12.25 to 12.50 percent, up from 11.75 percent, and -- $450 million (proceeds) of 10-year senior discount notes yielding to maturity about 200 basis points more than the 10-year notes. Credit Suisse First Boston and Salomon Smith Barney lead the sale, sources said. Moody's Investors Service rates the notes B3, while Standard & Poor's rates it B-minus. The expected yields on Winstar's debt are much higher than fiber-optic network provider Level 3 Communications Inc. (NasdaqNM:LVLT - news) had to offer as recently as Feb. 24, when it sold dollar-denominated junk debt. Level 3, whose debt is rated B3 by Moody's and single-B by S&P, sold eight-year senior notes yielding 11 percent, 10-year senior notes yielding 11.25 percent, and 10-year senior discount notes yielding 12.875 percent to maturity. Ullerich, who may buy Winstar's debt if the final yields are attractive, said two factors may be driving Winstar's yields higher. First, most recent junk debt issuance has been in telecom, and many portfolio managers may have enough exposure the sector. Second, high-yield mutual funds have been shedding cash, nearly $3.0 billion since November. ``It's a challenging environment overall,' said Ullerich. "It's not a reflection on Winstar itself. Winstar said it will use proceeds to buy back $660 million of senior notes, and offer to exchange its new notes for $870 million of subordinated notes and preferred stock. It will also use some proceeds for general corporate purposes.