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To: mike thomas who wrote (59987)	6/26/2002 4:47:23 PM
From: Eric	Respond to of 77400

Looks like Nortel and Juniper are going to hurt on this one.... As WorldCom Woes Shrink Telco Loans,Gear Makers To Suffer By CHRISTINE NUZUM and DONNA FUSCALDO Of DOW JONES NEWSWIRES NEW YORK -- WorldCom Inc.'s (WCOM) disclosure of what could be one of history's largest accounting frauds may further tighten lending to carriers and send telecom equipment sales to yet new lows. "All the telecom companies are going to find that obtaining new capital is going to be increasingly difficult," said Sean Egan of Egan Jones, a private credit ratings agency. "They are going to be scrutinizing every single check going out the door, so if they can defer any capital expenditures, they're going to do that." Telecom carriers have already drastically curbed their spending in the last year and a half, decimating the sales and stocks of virtually all telecom and networking equipment suppliers. Amid recession, pricing pressure, slowing demand for local phone service, a bevy of bankruptcies and accounting investigations at companies like Qwest Communications International Inc. (Q) and bankrupt Global Crossing, lenders have been wary of the sector. WorldCom's scandal is likely to scare them off even more and cause carriers to hoard their cash. "The cash balance that you have now and the cards that you have in your hand are all that you're going to have for a while," said Susan Kalla, an analyst with Friedman Billings Ramsey. Nortel Networks Corp. (NT) and Lucent Technologies Inc. (LU) are both large vendors to WorldCom, as they are to the other large carriers. Kalla said that Nortel is particularly exposed. "Nortel was having difficulty before, they're going to have more difficulty now," said Egan, who is less concerned about Lucent, which he sees as less burdened by debt, and fiber manufacturer Corning. "Corning has at least some other businesses to help hold them up," he said. However, Nortel spokesman David Chamberlin said Nortel has "no material exposure" to WorldCom or customer financing with it. Recently, Nortel shares were down 13% while those of Lucent were down 17%. Corning shares were down 17%. In the networking equipment sector, analysts said that Juniper Networks (JNPR), which counts WorldCom as one of its largest customers, representing more than 10% of its sales, by far has the greatest exposure and is the most sensitive to cuts in capital spending by WorldCom. For the whole story go to: online.wsj.com