NEW YORK-Telecommunications carriers broke records Aug. 6 in the debt markets, with WorldCom Inc. selling the largest corporate bond issue ever and a Bell Atlantic Corp. subsidiary, the biggest exchangeable note deal.
The magnitude of the issues is all the more remarkable given a dicey debt market lately. Investors are insecure over the possible spill-over effect of the Asian crisis on the profits of American companies. Furthermore, a low interest rate environment and a large number of mega-mergers mean there are many would-be corporate borrowers seeking infusions of capital at the same time.
WorldCom, Jackson, Miss., sold $6.1 billion in short-term notes and long-term bonds Aug. 6 after increasing the deal size by more than 20 percent from the $5 billion expected to be offered.
Proceeds of the WorldCom sale will refinance bank loans it took out to pay $7 billion to buy British Telecommunications plc’s 20-percent stake in MCI Communications Corp.
Also on Aug. 6, Bell Atlantic Financial Services Inc., a wholly owned subsidiary of New York-based Bell Atlantic Corp., placed privately a $3.5 billion issue of senior exchangeable notes due 2005. Each debt security is exchangeable, between July 1, 2002, and Sept. 8, 2005, into 87.29 shares of Cable & Wireless Communications plc.
Formed last year by the merger of four United Kingdom-based cable TV companies, C&W Communications is owned 53 percent by London-based Cable & Wireless plc and 18.5 percent by Bell Atlantic.
