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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Alomex who wrote (146831)	9/4/2002 3:38:11 PM
From: Oeconomicus	Read Replies (1) \| Respond to of 164684

I did say I thought it had been done (or tried, at least), but that I couldn't find an example right away. Air Canada has some outstanding as well. But Sanwa or Air Canada doing it in the past hardly proves that "companies [do it] all the time." Can you find a US company perpetual debt issue? Can you find one anywhere in the world that wasn't done by an investment-grade credit (when issued)? This is not an option for AMZN. As for what "T. Friedman" says, are you referring to Thomas Friedman of the NY Times? His expertise is in Middle East affairs, isn't it? If I have the wrong T. Friedman, who did you mean? I'm curious because everything my banking bosses ever taught me about corporate credit says that if your only source of repayment is refinancing, you've got a problem. Sure, lots of debt is issued that matures ahead of the cash flows that should repay it. But I doubt anyone with any credit experience would say that "most" debt is issued with refinancing as it's primary source of repayment. BTW, whether or not much, or even most, debt actually ends up being refinanced, that does not equate to, or even imply, an "understanding that the principal will never truly be paid." Companies using debt financing tend to be capital intensive and, as long as they are growing, they tend to issue more debt over time. That the immediate application of proceeds from new debt happens to be repayment of old debt does not mean that the company is unable to pay it's debts from cash flow. Cash flows generated by the business are reinvested to grow the business rather than being accumulated to sit idle in an account, waiting to be used to meet debt maturities. Bob