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To: SDR-SI who wrote (3004)	7/23/1998 4:32:00 PM
From: Anthony Wong	Respond to of 11568

WorldCom May Sell Up to $5 Billion of Bonds (Update2) Bloomberg News July 23, 1998, 3:06 p.m. ET WorldCom May Sell Up to $5 Billion of Bonds (Update2) (Updates with details of WorldCom bond ratings in next-to- last paragraph.) New York, July 23 (Bloomberg) -- WorldCom Inc., poised to become the No. 2 U.S. long-distance phone company after it buys MCI Communications Corp., may sell up to $5 billion of bonds in what could be the biggest corporate sale ever, investors said. Details are still sketchy, but investors who have talked with securities firms handling the sale said the company is preparing to sell $3 billion to $5 billion of bonds. Presentations to investors are expected the first week of August. Andy Palmer, who helps manage $2 billion of securities at ASB Capital Management in Washington, D.C., said big sales typically offer a little extra yield to generate enough investor interest to absorb all the bonds. ''The last thing they want to do is come out with price talk that's too expensive and then have to start widening it out,'' he said. ''They have this pattern of coming at a slight concession,'' which helps bond prices rise in secondary trading and attracts more buyers, he said. In January, WorldCom, the No. 4 U.S. long-distance telephone company before buying MCI, filed with the Securities and Exchange Commission to sell up to $5 billion of debt securities. Proceeds would be used for general corporate purposes, including repayment of debt and acquisitions. If the sale is $5 billion, it would exceed the $4.3 billion record for corporate bond sales set by Norfolk Southern Corp. last year. The biggest sale so far this year was by Niagara Mohawk Power Corp. which sold $3.48 billion of bonds in an eight- part sale in June. Today, WorldCom said second-quarter earnings rose more than fivefold, beating expectations, on surging sales of Internet and data services. Even though WorldCom posted strong earnings, the prospect of a large new sale caused the yield spread between WorldCom's outstanding bonds and Treasuries to widen. The yield spread on its 7.75 percent notes due in 2007 widened about 3 basis points to 104 basis points, traders said. WorldCom agreed in November to buy MCI Communications Corp. for $51 a share in stock, or about $41.8 billion, including assumed debt. Following the acquisition, WorldCom's senior debt was raised to ''Baa2'' by Moody's Investors Service. It's debt is rated ''BBB-'' by Standard & Poor's Corp., which says the rating may improve. Salomon Smith Barney, which is the lead manager, wouldn't comment on the sale. Credit Suisse First Boston and Lehman Brothers will help manage the sale. --Kathleen Spillane in the New York newsroom (212) 318-2034/mq