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Technology Stocks : PCW - Pacific Century CyberWorks Limited -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (1696)	7/24/2001 12:44:17 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

Merrill: PCCW Earnings Pressure Lessened on Aborting Bond Issue Jul 23, 2001 - 12:34:32 HKT Quamnet News Service Merrill Lynch said Pacific Century CyberWorks' (0008) decision to cancel its bond issue would lessen the pressure on earnings in the short term. "We believe that institutional investors would appreciate that the company needs not hurry itself to refinance on unfavorable terms given that the first tranche of loan (US$1.5 billion) will not be due until 2004," analysts Agnes Ho, Alistair Scott, Francis Cheung and Patrick Russel said in today's research note to the house's clients. PCCW said last Friday that it decided not to proceed with the bond offering which was intended to partially refinance its syndicated loans maturing in three to seven years. Indications from the credit markets have suggested that the bond could have been priced in the range of 260 basis points to 300 basis points above the 10-year Treasury bond, 330 basis points to 370 basis points higher than the current interest rate (111 basis points over the Libor) on the syndicated loan, it said. The house said it estimates that the higher interest rate would hurt PCCW's earnings per share by 10 percent to 15 percent in 2001 and 13 percent to 20 percent in 2002 had the bond of US$2.5 billion to US$2.8 billion been issued at 280 basis points above Treasury bond.