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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (10211)	3/9/2001 12:35:37 PM
From: Ian@SI	Respond to of 14638

Another possibility is SBC. Speculation only based on the relationship among SBC(Ameritech), Bell Canada and NT.

To: Kenneth E. Phillipps who wrote (10211)	3/9/2001 5:55:05 PM
From: William Hunt	Respond to of 14638

03/09 14:11 Williams, Other Telecom Firms Add Incentives on Loans (Update1) By Mark Lake New York, March 9 (Bloomberg) -- Williams Communications Group Inc. and other telecommunications firms are offering juicy yields and other incentives to get new loans from banks as losses on telecom debt make lenders less willing to extend more credit. Williams agreed to pay higher yields than on its existing debt, put up collateral and pay early repayment penalties to get a $950 million loan from Lehman Brothers Inc. and Salomon Smith Barney. That's after J.P. Morgan Chase & Co. and Bank of America Corp., its biggest lenders, wouldn't arrange the transaction because they are already loaded down with loans to the company. The two banks have ``positions that are already quite large,'' said Howard Kalika, treasurer at the Tulsa, Oklahoma- based communications company, which owns a 33,000-mile fiber-optic communications network. Both will still participate in the new loan, he added. Williams isn't alone in having to offer concessions. Level 3 Communications, which is building telephone and data networks in the U.S., Europe and Asia, added repayment penalties to a new loan and might have to increase yields, bankers said. FairPoint Communications, a provider of telecom services to small- and medium-sized businesses, agreed to pay more in interest costs. Banks have been hurt by the falling value of many telecom loans, making them reluctant to extend money. An $800 million loan to Teligent Inc., arranged by J.P. Morgan in 1998, has fallen to 22 cents on the dollar, for instance, while another to WinStar Communications Inc. is now valued at 82 cents, traders said. Cash Crunch Telecom companies such as Teligent have seen losses mount as competition and a slowing economy have crimped sales and cash flow at a time when these firms are laying out money to build networks and grow their businesses. The Bloomberg index of U.S. telecommunication services companies has fallen 42 percent during the past year. ``There's a long way to go in the telecom shake-out to recognize the winners and losers,'' said John Fraser, who manages high-yield bonds and loans at Angelo, Gordon & Co. Banks are tightening lending standards across the board, so much so that Federal Reserve Board Chairman Alan Greenspan said yesterday they shouldn't halt loans to qualified borrowers. A Fed survey last month showed about 60 percent of U.S. banks placed tougher standards on commercial and industrial loans in the November-January period. Enticements To help entice lenders, Williams is paying about 1.5 percentage points more in yield on its new loan than it paid two years ago. The company also agreed to pledge its assets as collateral and pay lenders a fee, or call premium, of 3 percent if it repaid $500 million of the credit within a year. Level 3 added the same call premiums to a new $400 million loan, and may have to offer a higher yield on the debt, bankers said. J.P. Morgan, Goldman Sachs Group Inc. and Morgan Stanley Dean Witter & Co. are arranging the loan to help the Broomfield, Colorado-based company complete its network. Charlotte-based Fairpoint, which recently fired 365 employees, or 15 percent of its workforce, is offering its lenders an extra half point in yield to entice them to provide a further $150 million in funds. Williams -- which is to be spun off from its parent Williams Cos. this year -- said earlier last month it still needs to find $3 billion in additional funding before cash flow starts exceeding expenses, which the company expects to happen in 2003. In addition to the new loan, the company plans to sell $1.2 billion to $1.5 billion in a private sale of structured notes this year or next. The company completed its fiber-optic network last year and expects to have earnings before interest, taxes, depreciation and amortization by year-end. No Room Investors are concerned about the amount of debt these companies still need to take on at a time when slowing growth is hurting results. Williams said its fourth-quarter loss widened to $55.5 million from $50 million in the year-earlier period. Level 3 said last month its fourth-quarter loss almost tripled to $552 million. What's more, many fund managers aren't willing to buy new loans from telecom companies because they already hold so much of their debt. Telecom firms borrowed $21.7 billion last year, which accounted for 13 percent of all high-yield loans in 2000, according to Portfolio Management Data. ``Funds' baskets are full,'' said Jonathan Trutter, who manages $1.4 billion of high-yield loans for Deerfield Capital Management LLC in Chicago. ``There's little room for new deals.'' BEST WISHES BILL PS A customer perspective on the marketplace ( tight )