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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: EPS who wrote (26381)	4/2/1999 7:51:00 AM
From: EPS	Respond to of 42771

(OT)Telecom giants ring up debt By Stephanie Gates Red Herring Online March 12, 1999 Everyone wants money, and cheaper is better. Lucent Technologies (LU) increased the size of a 30-year bond offering sold this week by 36 percent to $1.36 billion. These long-term bonds carry an interest rate of 6.45 percent, coming due March 15, 2029. Lucent is one of several high-quality bond issuers to visit the corporate debt markets these days in pursuit of cheap money. This money is "cheap" relative to other sources of capital in the U.S. because of a strong domestic economy, low inflation, and low interest rates. THRIFTY LUCENT Lucent plans to use the proceeds from the issuance to reduce the company's short-term commercial paper (unsecured corporate debt with a term of one year or less), which carries a higher interest rate. Basically, Lucent is looking to spend less on interest. Sam May, an analyst with Piper Jaffray, agrees with Lucent's strategy. "Money is reasonably cheap, and [Lucent's bond issuance is] cheaper than what it is replacing," he says. "Lucent is taking advantage of a reasonably good outlook on the overall infrastructure [market]," adds the analyst. Lucent supplies telecommunications equipment to large telecommunications companies, and with this debt offering, it's making a bet on sales growth. MA TOO AT&T (T) also plans to take advantage of a favorable debt market. The company is gearing up to issue as much as $10 billion in corporate bonds this month to help pay for recent acquisitions. Its $55 billion megamerger with cable giant Tele-Communications Inc. closed on Tuesday.