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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (17719)	2/19/2001 11:19:24 PM
From: Wyätt Gwyön	Respond to of 21876

Lucent Seems Likely to Raise $6.5 Billion As Several Banks Respond to CEO's Pitch By JATHON SAPSFORD and DENNIS K. BERMAN Staff Reporters of THE WALL STREET JOURNAL Lucent Technologies Inc. looks increasingly likely to succeed in its bid to raise $6.5 billion by the end of the week, a development that would remove some of the uncertainty clouding the company's prospects. interactive.wsj.com

To: Ian@SI who wrote (17719)	2/20/2001 2:18:05 PM
From: Gottfried	Respond to of 21876

Ian, Fitch lowers to BBB- from A [no link] (Press release provided by Fitch) NEW YORK, Feb 20 - Fitch has lowered the rating on Lucent Technologies Inc.’s (Lucent) senior unsecured debt to ’BBB-’ from ’A’. The commercial paper rating was lowered to ’F3’ from ’F1’. The company has been removed from Rating Watch Negative and placed on Rating Outlook Negative. This rating action reflects the eroding credit protection measures and several material concerns regarding this credit. Lucent’s focus on revenue growth created underlying problems in its business due to the questionable economic decisions made to meet revenue targets. The accelerated growth revealed weaknesses in executing a unified business strategy and highlighted lagging processes and systems. Additional issues, such as, unsustainable expense structure, lack of cash flow orientation, missed product introductions, and successive quarterly revisions caused Lucent’s credit measures to decline even further. The depth and breadth of the restructuring announcement in Lucent’s seven-point plan emphasizes the severity of the situation. In regards to the restructuring plan, Lucent must execute on the reductions in workforce, rationalization of various product lines, consolidation of corporate functions, and the elimination of duplicate sales and marketing efforts to avoid placing additional pressure on its credit rating. Lucent’s most pressing requirement is to finalize negotiations on a new $4.5 billion credit facility required for liquidity in 2001. The credit facility, which will be secured with Lucent and Agere assets, will give Lucent sufficient room to execute future strategic initiatives. The unsecured debt will be subordinate to this facility. Additional concerns surround the ability for Lucent to execute the IPO of Agere due to general market conditions. Upon completion of the IPO, Lucent will be able to assign $2.5 billion of its credit facility to Agere. This credit facility will be unsecured if Agere has a ’2’ short-term debt rating and ’BBB’ long-term debt rating. The IPO is also expected to provide Lucent with significant additional liquidity. Resolution of the Rating Outlook is dependent on Lucent executing the above concerns. The successful placement of the credit facility along with the Agere IPO will remove the near-term pressures for this credit. Longer term, the risk then moves to the execution of its restructuring plans along with plans along with meeting its aggressive revenue and cost control efforts.<