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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Dennis R. Duke who wrote (11460)	12/11/1998 6:07:00 PM
From: savolainen	Read Replies (1) \| Respond to of 42804

Dow Jones Newswires -- December 11, 1998 (from wsj) MRV Communications Conv Sub Notes Assigned CAA1 By Moody's NEW YORK (Dow Jones)--Moody's Investors Service assigned a Caa1 rating to the outstanding $90 million 5% convertible subordinated notes, due 2003, of MRV Communications, Inc., a manufacturer and marketer of optical high speed networks that integrate switching, routing, remote access and fiber optic transmission systems. The convertibles, issued in the original amount of $100 million, are subject to redemption at a price of 102 as of June 15, 2001, and may be converted at any time into shares of common stock at $27.0475 per share. The stock has been trading at about $6-7 per share, which enabled the company to recently repurchase $10 million convertible notes at a price of 53. The company's senior implied rating is B1. This is the first time that Moody's has rated the debt of the company. The rating agency said the rating outlook is stable. Moody's rating takes into account MRV Communications' wide range of leading high-speed network switching systems technologies and impressive array of customers, but moreover reflects the 30%-plus concentration of product sales among highly competitive fixed port LAN (local area network) stackable switches, which are characterized by rapidly declining average selling prices, and the structural as well as contractual subordination of the convertible notes. The rating also recognizes that, while MRV has frequently achieved time-to-market leadership with various switching functionalities and control features, including the first auto-negotiating switch, it has lost customer contracts to larger rivals that are able to provide sole sourcing of networking products. The rating additionally reflects MRV Communications' somewhat leveraged capitalization but also moderate debt to cash flow ratio. However, the rating is supported by MRV Communications' demonstrated ability to bring its state of the art proprietary technology early to market and present product offerings in both the LAN as well as WAN segments of the networking communications environment.