Qwest Communications hastily released its plans to sell
$1.5 billion in debt, due in 10 years, after the wire services picked up on
the item Friday morning.
The telephone company had originally planned on issuing a $1 billion debt
offering to financiers, but bumped up the price to pay for immediate
short-term debt financing.
The debt offering may be a pricey risk for Qwest, which will try to collect $1.5
billion in exchange for registered senior notes from investment firms at an
annual interest rate of 8.875 percent. Payment is due 10 years from
issuance of the notes.
The notes are not guaranteed, officials said in a statement.
The debt offering is the latest in a series of attempts by Qwest executives
to shore up losses at one of the four largest telephone and data carriers in
the nation.
Last month, the company’s short- and long-term credit ratings were slashed by
investors, prompting Fridays’ debt offering increase. Last year, in
November, Qwest announced in its fourth quarter and year-end report an
unanticipated revenue drop — Wall Street responded
by downgrading the carrier.
Press service Reuters Securities picked up on the filing amount change
Friday morning, which was immediately picked up by Dow Jones and others
Friday. Qwest officials put out a press release hours later and announced they would hold a conference call March 12 — when the offering is complete — with Wall Street investors.
Joseph Nacchio, Qwest chairman and chief executive officer, and Robin
Szeliga, executive vice president of finance and chief financial officer,
will attend to reassure jittery shareholders.
Since October of last year, powerhouse investment firms have been
downgrading the telephone company (and much of the high-tech
industry). The latest is Salomon Smith Barney, which downgraded Qwest from
“Buy” to “Neutral” Wednesday.
