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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (44210)	12/27/2000 3:20:18 PM
From: Softechie	Respond to of 57584

Could they go sideway? No? Dead money? Here's another CLEC went belly up and socked CSCO with a debt loss. Digital Broadband Commun Files For Chapter 11 Bankruptcy -------------------------------------------------------------------------------- DJ Digital Broadband Commun Files For Chapter 11 Bankruptcy 27 Dec 12:52 WASHINGTON (Dow Jones)--Digital Broadband Communications Inc. filed for Chapter 11 bankruptcy protection Wednesday in the U.S. Bankruptcy Court in Wilmington, Del., according to documents obtained by Federal Filings Business News. The high-speed Internet access provider listed total assets of $50,000 or less. The petition estimated total debts between $50 million and $100 million. While the company claims between 100 and 199 creditors, Digital Broadband, Waltham, Mass., didn't specify whether it expects funds to be available for distribution to unsecured creditors. The company lists Cisco Systems Inc. (CSCO) as its largest unsecured creditor, with an unliquidated claim estimated at $70 million. Verizon Communications (VZ) is next, asserting a claim of $11.1 million. According to news reports earlier in December, Digital Broadband Chief Executive Valeri Marks said employees were told the company had strong sales and was exceeding its own business goals, but it couldn't find funding. As a result of that inability, the company announced that it laid off 450 of its 526 employees. Ultimately, the funding would have been used to cover losses and network construction costs as the company tried to reach profitability. One source said Cisco Systems and Thomas H. Lee Co., Boston, scrapped additional investments after a third backer pulled out. Digital Broadband had drawn $70 million in financing from an existing $100 million credit line through Cisco, whose routers and other gear are used in the company's network, Marks said. As of Dec. 15, the company hadn't given a date when it would terminate its 650 DSL customers, which include school and municipal buildings in 85 Massachusetts cities and towns that have signed up for high-speed Internet access under the state's Massachusetts Community Network program. The service cost customers $400 a month. Digital Broadband Communications provides digital subscriber line high-speed Internet access and markets voice, data and Internet services to businesses and application service providers. -By Nick Braude; Dow Jones Newswires; 202-628-7686; nicholas.braude@dowjones.com (END) DOW JONES NEWS 12-27-00 12:52 PM

To: American Spirit who wrote (44210)	12/27/2000 3:22:54 PM
From: wannaBrich	Read Replies (2) \| Respond to of 57584

What do you think of a possibility that JDSU taking over LU? LU is their largest customer. LU will be spinning off their Micro Electronics Division soon, which could be the take over candidate by JDSU.

To: American Spirit who wrote (44210)	12/27/2000 3:26:52 PM
From: Eagle	Read Replies (1) \| Respond to of 57584

Frankly I think WCOM has a ways down to go--it has only dropped 22% since 11/3 while, for example, LU has dropped 45% in that same period of time--I think we will be able to get it at 11 --my top pick today was MANU up 27 % in 3 days for moi

To: American Spirit who wrote (44210)	12/27/2000 3:29:15 PM
From: Softechie	Read Replies (2) \| Respond to of 57584

Here's another bad news for CLEC. Moody's cuts Rhythms NetConnections. This is junk bond. Moody's cuts Rhythms NetConnections -------------------------------------------------------------------------------- (Press release provided by Moody's Investors Service) Approximately $1.1 Billion of Debt Securities Affected. NEW YORK, Dec 27 - Moody's Investors Service today downgraded the senior unsecured debt ratings of Rhythms NetConnections, Inc. ("Rhythms") to Caa1 from B3. Moody's also lowered the senior implied and issuer ratings to Caa1 from B3. Moody's outlook at the new rating level is negative. The ratings action follows the company's recent earnings announcement and its guidance on future results that fall short of Moody's expectations. The downgrade also reflects Moody's concern that Rhythms lacks sufficient liquidity to sustain its capital needs in the intermediate term. As of September 30, 2000, Rhythms recorded unrestricted cash and short-term investments of $670 million which it considers sufficient to fund its business plan through approximately December 2001. However, according to Moody's earlier calculations, the company has a funding gap in excess of $1 billion before it turns EBITDA positive. Public investor sentiment for the DLEC sector has suffered substantially during the course of this year without any indication of a rebound. Accordingly it may be difficult for the company to access the public markets to fund its growth. Rhythms is sponsored by a number of private equity partners, including Hicks Muse Tate and Furst, Microsoft, WorldCom and Cisco. There can be no assurance that these partners will provide additional private equity. Should Rhythms experience difficulty in obtaining additional funding, it would likely elect to conserve liquidity by scaling back its growth, however this course would probably have a negative impact on the company's debt service coverage timetable. In terms of line count, Rhythms is the smallest of the three major DLEC's, moreover ISP's represent a relatively smaller proportion (35% of total lines and 11% of revenues) of its customer base than its peers. The bulk of Rhythm's consumer business, about 16,000 installed lines at the end of the third quarter 2000, is distributed through two financially challenged ISP's, Flashcom Inc. and Telocity Inc. Recently, Flashcom filed for bankruptcy protection. In the case of Flashcom, Rhythms is attempting to migrate those lines installed with Flashcom to financially stronger ISPs or onto its own network. Telocity has recently agreed to be acquired by Hughes Electronics Corporation. As of the end of the third quarter of 2000, Rhythms stated that all customer accounts were current. The debt securities affected are: $300 million 14% senior notes due 2010, to Caa1 from B3 $325 million 12.75% senior notes due 2009, to Caa1 from B3 $290 million discount notes due 2008, to Caa1 from B3. $169 million 6.75% Cum. Conv. Preferred Stock, rated "ca" Rhythms NetConnections is headquartered in Englewood, Colorado. REUTERS Rtr 10:48 12-27-00