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Technology Stocks : AT&T -- Ignore unavailable to you. Want to Upgrade?

To: Resry who wrote (2243)	4/29/1999 9:48:00 PM
From: polarisnh	Read Replies (1) \| Respond to of 4298

Sprintbonds show investors keen on telecoms By Terence Gallagher NEW YORK, April 29 (Reuters) - Sprint Capital Corp.'s successful sale of $3.5 billion in global bonds on Thursday highlights investors' voracious appetite for the telecommunications sector, credit market watchers said. Huge infrastructure investment needs have sparked telecommunications companies to sell the largest corporate bond issues ever. Thursday's issue by Sprint, the third-largest U.S. long-distance company, follows hard on the heels of last month's record $8 billion debt offering by market leader AT&T Corp. (T - news), which eclipsed the previous record, last summer's $6.1 billion issue by number-two MCI WorldCom Inc (WCOM - news). Sprint itself did a $5 billion deal just last November. ''There has been a tremendous amount of debt issuance in this sector. That alone shows how popular these corporates can be,'' said Robert Schiffman, telecoms debt analyst at Donaldson Lufkin and Jenrette. Investors, spurred by rapid-fire technological developments and swiftly improving services in telecommunications, eagerly snapped up all four of those mammoth telecommunications issues, as well as several recent smaller ones, despite some concerns about oversupply. ''You only have to pick up the newspapers to read that telecom is going to be in the news going forward almost every day,'' said Bruce Widas, managing director of Warburg Dillon Read, which with Salomon Smith Barney was co-lead manager of the Sprint deal. Another sign of investors' readiness to throw money at the telecommunications sector was Wednesday's announcement that AT&T had lined up $30 billion in financing for its surprise $58 billion bid to acquire MediaOne Group Inc., the nation's No. 3 cable company. Sprint received over $7 billion in orders for its three-tranche offering, leading it to increase the size in the final hours from initial plans for $3 billion. Proceeds from the new issue will go toward financing negative cash flow at Sprint's PCS wireless service, as infrastructure spending is outpacing revenues. Despite the barrage of supply, yield spreads in the sector relative to Treasury yields have not widened significantly, Schiffman said. Sprint issued $1.0 billion in five-year notes at a yield 91 basis points over Treasuries, $750 million in 10-years at 124 basis points over, and $1.75 billion in 20-years at 126 basis points over. All three Sprint tranches priced at the low end of the range of expected yields, despite a Treasury rally that shaved about six basis points off the yields on Thursday morning, further proof of strong investor demand. Widas said Sprint's credit ratings are probably stable at current levels -- Baa1 from Moody's Investors Service and BBB-plus from Standard & Poor's -- despite having a negative outlook from both of those rating agencies. ''That is something investors have to take into account, but clearly investors are very comfortable with the credit as evidenced by what we were able to do with the order book here,'' he said.