Re: [CANSLIM] OT - Qwest bond swap


From: "NANCY POLCARO" <ZILLAGIRL@msn.com>
Subject: Re: [CANSLIM] OT - Qwest bond swap
Date: Thu, 26 Dec 2002 14:32:13 -0800

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TOM-CAN YOU TELL ME WHERE YOU LOOK FOR INFO LIKE THIS  ALL I CAN EVER FIN=
D IS A PRESS RELEASE IT SEEMS.  THANKS NANCY

- ----- Original Message -----
From: Tom Worley
Sent: Wednesday, December 25, 2002 5:13 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 ex=
penses goes up. Also noteworthy that only institutional holders were invo=
lved, this bond swap could not be "offered" to the public because Qwest's=
 financials have not been audited, and in light of the ongoing investigat=
ions. The FCC, while approving the entry into long distance service, also=
 expressed concerns over allegations that Qwest bribed competitors into s=
upporting their application by giving them secret deals for access to the=
ir network, and intends to monitor Qwest closely in the future. Several s=
tates are also investigating them and these deals.

Again from Yahoo: (formatting and marking is mine)
" =20
Holders of about $4 billion of Qwest bonds went to court to challenge the=
 exchange offer, which Qwest announced on Nov. 20. =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 bo=
nd -- or else fall lower in the pecking order for repayment in case Qwest=
 went broke. =20
Last week, Judge Denny Chin for the U.S. District Court in Manhattan deni=
ed a motion to block the exchange, saying the bondholders failed to prove=
 "irreparable harm." The bondholders later dropped their complaint. =20
Qwest said holders of $5.2 billion of Qwest Capital Funding Inc. debt mat=
uring 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. =20
Qwest had offered to exchange up to $12.9 billion of the old bonds,(so no=
t what I would call a successful offering, well under half accepted) whic=
h carried interest rates between 5.875 percent and 7.9 percent. The new d=
ebt carries rates between 13 percent and 14 percent."

Tom Worley
stkguru@bellsouth.net
AIM: TexWorley

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<HTML><BODY STYLE=3D"font:10pt verdana; border:none;"><DIV>TOM-CAN YOU TE=
LL ME WHERE YOU LOOK FOR INFO LIKE THIS&nbsp; ALL I CAN EVER FIND IS A PR=
ESS RELEASE IT SEEMS.&nbsp; THANKS NANCY</DIV> <DIV>&nbsp;</DIV> <BLOCKQU=
OTE style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BOR=
DER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style=3D"FONT: 10pt=
 Arial">----- Original Message -----</DIV> <DIV style=3D"BACKGROUND: #e4e=
4e4; FONT: 10pt Arial; COLOR: black"><B>From:</B> Tom Worley</DIV> <DIV s=
tyle=3D"FONT: 10pt Arial"><B>Sent:</B> Wednesday, December 25, 2002 5:13 =
AM</DIV> <DIV style=3D"FONT: 10pt Arial"><B>To:</B> CANSLIM</DIV> <DIV st=
yle=3D"FONT: 10pt Arial"><B>Subject:</B> [CANSLIM] OT - Qwest bond swap</=
DIV> <DIV>&nbsp;</DIV> <META content=3D"MSHTML 6.00.2800.1126" name=3DGEN=
ERATOR> <STYLE></STYLE>  <DIV><FONT face=3DArial>Here are some more detai=
ls. 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 not=
eworthy that only institutional holders were involved, this bond swap cou=
ld not be "offered" to the public because Qwest's financials have not bee=
n audited, and in light of the ongoing investigations. The FCC, while app=
roving the entry into long distance service, also expressed concerns over=
 allegations that Qwest bribed competitors into supporting their applicat=
ion by giving them secret deals for access to their network, and intends =
to monitor Qwest closely in the future. Several states are also investiga=
ting them and these deals.</FONT></DIV> <DIV><FONT face=3DArial></FONT>&n=
bsp;</DIV> <DIV><FONT face=3DArial>Again from Yahoo: (formatting and mark=
ing is mine)</FONT></DIV> <DIV><FONT face=3DArial>"</FONT>  <P><FONT face=
=3DArial>Holders of about $4 billion of Qwest bonds went to court to chal=
lenge the exchange offer, which Qwest announced on Nov. 20. </FONT> <P><F=
ONT face=3DArial>They said Qwest was forcing them to exchange their bonds=
 at a <EM>fraction of face value -- between 52.5 percent and 82.5 percent=
</EM>, depending on the bond -- or else fall lower in the pecking order f=
or repayment in case Qwest went broke. </FONT> <P><FONT face=3DArial>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 "ir=
reparable harm." The bondholders later dropped their complaint. </FONT> <=
P><FONT face=3DArial>Qwest said holders of <STRONG>$5.2 billion</STRONG> =
of Qwest Capital Funding Inc. debt maturing between 2004 and 2031 exchang=
ed it for <STRONG>$3.3 billion</STRONG> of more senior debt issued by Qwe=
st Services Corp. maturing in 2007, 2010 or 2014. </FONT> <P><FONT face=3D=
Arial><STRONG>Qwest had offered to exchange up to $12.9 billion of the ol=
d bonds</STRONG>,(<FONT color=3D#ff0000>so not what I would call a succes=
sful offering, well under half accepted)</FONT>&nbsp;which carried intere=
st rates between <STRONG>5.875 percent and 7.9 percent</STRONG>. The new =
debt carries rates between <STRONG>13 percent and 14 percent</STRONG>."</=
FONT></P> <P><FONT face=3DArial></FONT>&nbsp;</P></DIV> <DIV><FONT face=3D=
Arial>Tom Worley<BR></FONT><A href=3D"mailto:stkguru@bellsouth.net"><FONT=
 face=3DArial>stkguru@bellsouth.net</FONT></A><BR><FONT face=3DArial>AIM:=
 TexWorley</FONT></DIV></BLOCKQUOTE></BODY></HTML>

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