Go to Jeff Salisbury LWGate Home Page.From: "Fred Richards" <ffradrich@attbi.com>
Subject: RE: [CANSLIM] OT - Qwest bond swap
Date: Wed, 25 Dec 2002 08:34:54 -0600
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Top of Thread: [CANSLIM] OT - Qwest bond swap "Tom Worley"
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This is a multi-part message in MIME format. - ------=_NextPart_000_0008_01C2ABF0.7FDBB0C0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit Slept in after Midnight services and delivering all those presents . . . Tom is right, Qwest is a great example of the technical and charting giving a false signal and where looking at the news and fundamentals might give an investor a better understanding of the opportunities available in the stock. From my perspective, Qwest is using the old "smoke and mirrors" strategy in an attempt to stave off bankruptcy. While some investors may profit as the stock vacillates up and down, the future for Qwest with all of the stockholder and bondholder suits as well as the states and SEC investigations is doubtful. Only the lawyers win in these types of stocks. The stockholders will be left holding the bag and the people responsible, e.g., the CEO and the Board of Directors, will take their marbles and skate free. This is not a stock a CANSLIM investor should consider. There are way too many, (if only one exists), good stocks to invest in rather than a embattled company like Qwest. Now a speculator might be willing to take the risk. But a CANSLIM investor . . . never! So now that Mrs.. Claus has said, the presents are ready to open . . . I will head back up the chimney and on the way, Wish all of you a Very Merry Christmas and Best Wishes for a Happy, Healthy, and Bountiful New Year! Fred Richards -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tom Worley Sent: Wednesday, December 25, 2002 7:11 AM To: CANSLIM Subject: [CANSLIM] OT - Qwest bond swap Here are some more details. As I suspected, the cost of servicing the new debt will considerably exceed what the old bonds were paying because of the drastically higher "junk bond" rates. So total debt goes down, but expenses goes up. Also noteworthy that only institutional holders were involved, this bond swap could not be "offered" to the public because Qwest's financials have not been audited, and in light of the ongoing investigations. The FCC, while approving the entry into long distance service, also expressed concerns over allegations that Qwest bribed competitors into supporting their application by giving them secret deals for access to their network, and intends to monitor Qwest closely in the future. Several states are also investigating them and these deals. Again from Yahoo: (formatting and marking is mine) " Holders of about $4 billion of Qwest bonds went to court to challenge the exchange offer, which Qwest announced on Nov. 20. They said Qwest was forcing them to exchange their bonds at a fraction of face value -- between 52.5 percent and 82.5 percent, depending on the bond -- or else fall lower in the pecking order for repayment in case Qwest went broke. Last week, Judge Denny Chin for the U.S. District Court in Manhattan denied a motion to block the exchange, saying the bondholders failed to prove "irreparable harm." The bondholders later dropped their complaint. Qwest said holders of $5.2 billion of Qwest Capital Funding Inc. debt maturing between 2004 and 2031 exchanged it for $3.3 billion of more senior debt issued by Qwest Services Corp. maturing in 2007, 2010 or 2014. Qwest had offered to exchange up to $12.9 billion of the old bonds,(so not what I would call a successful offering, well under half accepted) which carried interest rates between 5.875 percent and 7.9 percent. The new debt carries rates between 13 percent and 14 percent." Tom Worley stkguru@bellsouth.net AIM: TexWorley - ------=_NextPart_000_0008_01C2ABF0.7FDBB0C0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2719.2200" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2>Slept=20 in after Midnight services and delivering all those presents . .=20 .</FONT></SPAN></DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2></FONT></SPAN> </DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2>Tom is=20 right, Qwest is a great example of the technical and charting giving a = false=20 signal and where looking at the news and fundamentals might give an = investor a=20 better understanding of the opportunities available in the=20 stock.</FONT></SPAN></DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2></FONT></SPAN> </DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2>From=20 my perspective, Qwest is using the old "smoke and mirrors" strategy in = an=20 attempt to stave off bankruptcy. While some investors may profit = as the=20 stock vacillates up and down, the future for Qwest with all of the = stockholder=20 and bondholder suits as well as the states and SEC investigations is=20 doubtful. Only the lawyers win in these types of=20 stocks.</FONT></SPAN></DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2></FONT></SPAN> </DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2>The=20 stockholders will be left holding the bag and the people responsible, = e.g., the=20 CEO and the Board of Directors, will take their marbles and skate=20 free. This is not a stock a CANSLIM investor should = consider. There=20 are way too many, (if only one exists), good stocks to = invest in=20 rather than a embattled company like Qwest.</FONT></SPAN></DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2></FONT></SPAN> </DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2>Now a=20 speculator might be willing to take the risk. But a CANSLIM = investor . . .=20 never!</FONT></SPAN></DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2></FONT></SPAN> </DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2>So now=20 that Mrs.. Claus has said, the presents are ready to open . . . I will = head back=20 up the chimney and on the way, </FONT></SPAN></DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2></FONT></SPAN> </DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2>Wish=20 all of you a Very Merry Christmas and Best Wishes for a Happy, Healthy, = and=20 Bountiful New Year!</FONT></SPAN></DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2></FONT></SPAN> </DIV> <DIV><SPAN class=3D580112414-25122002><FONT face=3DArial color=3D#0000ff = size=3D2>Fred=20 Richards</FONT></SPAN></DIV> <BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px"> <DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT = face=3DTahoma=20 size=3D2>-----Original Message-----<BR><B>From:</B>=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>Tom=20 Worley<BR><B>Sent:</B> Wednesday, December 25, 2002 7:11 = AM<BR><B>To:</B>=20 CANSLIM<BR><B>Subject:</B> [CANSLIM] OT - Qwest bond = swap<BR><BR></FONT></DIV> <DIV><FONT face=3DArial>Here are some more details. As I suspected, = the cost of=20 servicing the new debt will considerably exceed what the old bonds = were paying=20 because of the drastically higher "junk bond" rates. So total debt = goes down,=20 but expenses goes up. Also noteworthy that only institutional holders = were=20 involved, this bond swap could not be "offered" to the public because = Qwest's=20 financials have not been audited, and in light of the ongoing = investigations.=20 The FCC, while approving the entry into long distance service, also = expressed=20 concerns over allegations that Qwest bribed competitors into = supporting their=20 application by giving them secret deals for access to their network, = and=20 intends to monitor Qwest closely in the future. Several states are = also=20 investigating them and these deals.</FONT></DIV> <DIV><FONT face=3DArial></FONT> </DIV> <DIV><FONT face=3DArial>Again from Yahoo: (formatting and marking is=20 mine)</FONT></DIV> <DIV><FONT face=3DArial>"</FONT>=20 <P><FONT face=3DArial>Holders of about $4 billion of Qwest bonds went = to court=20 to challenge the exchange offer, which Qwest announced on Nov. 20. = </FONT> <P><FONT face=3DArial>They said Qwest was forcing them to exchange = their bonds=20 at a <EM>fraction of face value -- between 52.5 percent and 82.5 = percent</EM>,=20 depending on the bond -- or else fall lower in the pecking order for = repayment=20 in case Qwest went broke. </FONT> <P><FONT face=3DArial>Last week, Judge Denny Chin for the U.S. = District Court in=20 Manhattan denied a motion to block the exchange, saying the = bondholders failed=20 to prove "irreparable harm." The bondholders later dropped their = complaint.=20 </FONT> <P><FONT face=3DArial>Qwest said holders of <STRONG>$5.2 = billion</STRONG> of=20 Qwest Capital Funding Inc. debt maturing between 2004 and 2031 = exchanged it=20 for <STRONG>$3.3 billion</STRONG> of more senior debt issued by Qwest = Services=20 Corp. maturing in 2007, 2010 or 2014. </FONT> <P><FONT face=3DArial><STRONG>Qwest had offered to exchange up to = $12.9 billion=20 of the old bonds</STRONG>,(<FONT color=3D#ff0000>so not what I would = call a=20 successful offering, well under half accepted)</FONT> which = carried=20 interest rates between <STRONG>5.875 percent and 7.9 percent</STRONG>. = The new=20 debt carries rates between <STRONG>13 percent and 14=20 percent</STRONG>."</FONT></P> <P><FONT face=3DArial></FONT> </P></DIV> <DIV><FONT face=3DArial>Tom Worley<BR></FONT><A=20 href=3D"mailto:stkguru@bellsouth.net"><FONT=20 face=3DArial>stkguru@bellsouth.net</FONT></A><BR><FONT = face=3DArial>AIM:=20 TexWorley</FONT></DIV></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_0008_01C2ABF0.7FDBB0C0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". 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Next Article (by Author): [CANSLIM] During the Holiday's, should you pay attention to the statistics? "Fred Richards"
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