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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (34698)	6/3/2003 9:21:23 PM
From: Box-By-The-Riviera™	Respond to of 74559

like diamonds. 3 c's. indeed.

To: TobagoJack who wrote (34698)	6/4/2003 12:21:27 AM
From: elmatador	Read Replies (1) \| Respond to of 74559

<<is awash with cash>> This sounds like music to Elmat. Jay, those telecom vendors -3 in the last two weeks SI, LU and now ALA and with Ericsson on the cards soon- issuing convertibles left and right is one of the reasons I say, the bottom has been reached. NOTE: "Analyst Redeye claims Ericsson needs additional SEK 10b. Ericsson has a strong financial position today, but by year-end it will be different, according to the analyst house Redeye." (Dagens Industri) I am looking the money bag. I am looking to the money bag, Jay! Alcatel Published: June 3 2003 21:13 \| Last Updated: June 3 2003 21:13 Alcatel has hitched its wagon to the boom in convertible bonds. Following Siemens' lead, it is taking advantage of low interest rates and tightening credit spreads. Six months ago the French telecoms group unsettled investors with a mandatory convertible. On Tuesday is returned to the market with a more aggressively priced straight convertible, though market resistance forced it to trim the issue's maturity. While mandatory convertibles highlight the weakness of the issuer's balance sheet, the terms of Alcatel's latest offering reflect confidence that its restructuring is making progress. Last December's mandatory convertible was sold at a conversion price only slightly above the shares, while the latest ?1bn-?1.15bn issue has a conversion price of ?16.18, a 100 per cent premium to Monday's close. Tuesday's 5 per cent fall in Alcatel's share price reflects the dilution expected from conversion. But by applying half of the 7½-year issue to pay down bonds maturing in 2004-2005, it is reducing short-term refinancing pressures. With half the funds being raised available for general financing, Alcatel is awash with cash. The total available is about ?7bn, falling to a still respectable ?5bn after restructuring costs and debt repayments. Alcatel has recovered impressively in a sector still mired in losses. But the new bond's gross yield of 4.75 per cent to maturity assumes a return to investment grade that the company has to yet achieve.