Tuesday, March 18, 2008

Debt Rumors

While the credit crunch tightens companies looking to re-finance debt like Vonage, XO, and L3, will find it difficult and expensive. Here's the rumors:

  1. Vonage is looking to re-fi $253M in debt due in Dec. No one wants it. Heck, if Bear Stearns went for $2 per share, can you imagine what else lurks behind the curtains of the other Wizards on Wall Street? Who has the cash to risk on Vonage, who just started up the TV ad machine again?!
  2. XO's minority investors want the debt refinanced so their is less interest being paid to Icahn. Also, XO has a build out strategy (just launched Charlotte) that requires cash. Each lateral build off of the fiber run costs between $7,000 and $28,000.
  3. The company refinanced $2.5 billion in debt last year and carries a total of $6.9 billion in debt. That's a heavy load considering the company has only $723 million in cash on its books. [cnnmoney]

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