RealTime IT News

Genuity Floats $1.15 Billion in Bonds

Internet infrastructure giant Genuity has raised $1.15 billion through the placement of four-year floating rate notes, a move to ensure it has the resources needed to operate through the information technology (IT) spending slump.

The Woburn, Mass., company said the securities are backed by a letter of credit drawn under its amended $2 billion credit agreement with a syndicate of banks.

Additionally, New York telecom carrier Verizon Communications agreed to increase the amount of its credit facility with Genuity to $2 billion, and to extend the maturity to 2005.

"In a slowing economic environment, customers are not only looking for high-quality services, they also want to know that their provider is financially stable," said Daniel P. O'Brien, Genuity's CFO. "Securing this funding provides sufficient capacity to meet our business needs."

With these transactions and the remaining amounts available under the company's credit agreement, Genuity has $4 billion in committed, long-term debt capital.

A large capital pool is key to weathering difficult times. The IT slowdown has forced several large companies to shut down or dramatically restructure. For example, last week, Exodus Communications , a Santa Clara, Calif., provider of hosting, filed for Chapter 11 banruptcy protection.

Shares of GENU closed Friday at 1.57. In the last 52 weeks, the issue has ranged from 1.2 to 6.75.