60 Milliarden Convertibles werden fällig weil die Aktien weit unter dem Ausgabekurs liegen und ein Umtausch in Aktien somit ausscheidet.Betroffen sind neben Tyco andere Grössen wie Vivaldi,...Lagardere SCA muss im Dezember 2003 770 Millionen Convertible Bonds zurückzahlen.Tyco muss in den nächste 9 Monaten 8,7 Milliarden Schulden zurückzahlen,davon im Februar 2,3 Convertible Bonds und im November 3,6 Milliarden.Es beabsichtige im Februar zu zahlen sagt der Firmen sprecher Vivendi muss nächstes Jahr 3,8 Milliarden Schulden zurückzahlen und es bestehen Zweifel,ob sie es schaffen
Tyco, Others Face $60 Bln in Payments on Convertibles (Update3)
By John Glover
London, Aug. 16 (Bloomberg) -- Tyco International Ltd., Vivendi Universal SA and more than 50 other companies around the world may have at least $60 billion in unexpected cash payments due by the end of next year.
That's the amount of convertible bonds they may be forced to redeem because tumbling share prices eliminated investors' incentive to exchange the debt for stock. Tyco investors can force the company to pay them $2.3 billion in February because its bonds can be converted into stock at or above $87.92. The shares closed 4 cents higher at $13.30 on the New York Stock Exchange.
``For any company in this situation the fact that markets are going down is not good news,'' said Pierre Sellier, treasurer of Lagardere SCA, France's second-largest media company, which may have to repay 768 million euros ($748 million) of convertible bonds in December 2003.
Last year companies sold a record $160 billion of the securities, up from $106 billion in 2000, according to Deutsche Bank AG. Companies often pay less than half the interest required on regular bonds and don't have to repay the cash at all because convertible bonds can be exchanged for their stock if the price rises above a preset amount.
The problem facing a growing number of companies is the shares linked to almost half of the securities in the $440 billion global market are trading below the price at which they can be converted, according to Robert Barron, an analyst at Deutsche Bank in New York.
Financing With Equity
``Companies thought they were financing themselves with equity by selling convertibles,'' said Beat Thoma, who helps oversee about $600 million of convertible bonds at Fisch Asset Management in Zurich. ``Now it's turned into straight debt.''
Companies are increasingly amassing debt. As of March, U.S. corporations owed $4.9 trillion, up from $3.4 trillion in 1997, said John Puchalla, an economist at Moody's Investors Service. Debt exceeded their cash flow by 5.9 times from 4.4 times five years ago.
Tyco and Vivendi are among the companies that used convertible bonds to help finance acquisitions.
Tyco's debt repayments of $8.7 billion in the next nine months include $2.3 billion of convertible bonds in February and $3.6 billion in November. The company has the option to redeem the bonds in cash, shares or a combination of the two. It intends to pay the bonds in cash in February, said spokesman Gary Holmes.
Tyco's shares dropped 77 percent this year on concern about the company's accounting standards. Tyco ousted Dennis Kozlowski as chief executive in June.
Clear Channel Communications Inc., which dominates the U.S. radio industry, has two convertible bonds worth a total of almost $1.58 billion maturing by April. Its shares would have to rise at least 125 percent in one case and almost quadruple in the other to avoid a cash payment.
The company plans to use part of its $3.3 billion bank credit lines to repay the bonds, Randy Palmer, vice president for investor relations, said in an e-mail.
Selling Stakes
Besides selling bonds that can be converted into their own shares, some issuers have sold debt that can be exchanged for stock of other companies they hold.
Vivendi Universal SA is on the hook for 3.46 billion euros next year. It has 1.8 billion euros of bonds exchangeable its utility unit's shares that investors can demand be repaid in March. Another 1.44 billion euros of bonds, due July, are exchangeable for stock of British Sky Broadcasting Group Plc.
Shares of the world's second-largest media company plunged 43 percent this week, falling as low as 8.94 euros yesterday, amid concern it's running out of cash to make debt payments coming up even sooner.
``I do have some doubts about Vivendi's ability to roll over its debt,'' said Nathalia Barazal, a convertible bond fund manager at Cyril Finance in Paris.
Lagardere's bonds are exchangeable for shares of T-Online International AG, which have fallen about 20 percent this year. ``We can reasonably hope markets will bounce back'' by the end of next year, said Sellier, the treasurer. ``We have a strong balance sheet and unused credit lines -- everything we need to meet any cash obligations.''
Hutchison Whampoa
Hutchison Whampoa Ltd., controlled by billionaire Li Ka- shing, raised $5.66 billion in 2000 and 2001 selling bonds exchangeable for Vodafone Group Plc stock. It will have to repay by January 2004 unless Vodafone's shares triple.
``We are fully aware of our obligation and we stand by the terms of the issue,'' said Nora Yong, a spokeswoman for the company.
The prospect of a cash repayment can hurt a company's share price, further reducing the chances the bonds will be converted into stock. Havas SA fell almost 7 percent on Wednesday on concern the advertising company will have to seek additional financing to repay $1.2 billion of convertible bonds in 2006.
Companies that can't pay can try to persuade investors to hold on to their bonds.
In December, Comcast Corp. avoided being forced to repay $1.1 billion of zero-coupon convertible bonds by adding another date a year later on which investors could opt to sell them back to the company.
William Dordelman, Comcast Corp.'s vice president of finance, expects bondholders will seize their chance to force repayment this December and has earmarked part of a $12.8 billion bank credit to repay bondholders.
``It was cheap debt but we're coming to the end of the road,'' Dordelman said. ``I wish it would last longer.''
Tyco, Others Face $60 Bln in Payments on Convertibles (Update3)
By John Glover
London, Aug. 16 (Bloomberg) -- Tyco International Ltd., Vivendi Universal SA and more than 50 other companies around the world may have at least $60 billion in unexpected cash payments due by the end of next year.
That's the amount of convertible bonds they may be forced to redeem because tumbling share prices eliminated investors' incentive to exchange the debt for stock. Tyco investors can force the company to pay them $2.3 billion in February because its bonds can be converted into stock at or above $87.92. The shares closed 4 cents higher at $13.30 on the New York Stock Exchange.
``For any company in this situation the fact that markets are going down is not good news,'' said Pierre Sellier, treasurer of Lagardere SCA, France's second-largest media company, which may have to repay 768 million euros ($748 million) of convertible bonds in December 2003.
Last year companies sold a record $160 billion of the securities, up from $106 billion in 2000, according to Deutsche Bank AG. Companies often pay less than half the interest required on regular bonds and don't have to repay the cash at all because convertible bonds can be exchanged for their stock if the price rises above a preset amount.
The problem facing a growing number of companies is the shares linked to almost half of the securities in the $440 billion global market are trading below the price at which they can be converted, according to Robert Barron, an analyst at Deutsche Bank in New York.
Financing With Equity
``Companies thought they were financing themselves with equity by selling convertibles,'' said Beat Thoma, who helps oversee about $600 million of convertible bonds at Fisch Asset Management in Zurich. ``Now it's turned into straight debt.''
Companies are increasingly amassing debt. As of March, U.S. corporations owed $4.9 trillion, up from $3.4 trillion in 1997, said John Puchalla, an economist at Moody's Investors Service. Debt exceeded their cash flow by 5.9 times from 4.4 times five years ago.
Tyco and Vivendi are among the companies that used convertible bonds to help finance acquisitions.
Tyco's debt repayments of $8.7 billion in the next nine months include $2.3 billion of convertible bonds in February and $3.6 billion in November. The company has the option to redeem the bonds in cash, shares or a combination of the two. It intends to pay the bonds in cash in February, said spokesman Gary Holmes.
Tyco's shares dropped 77 percent this year on concern about the company's accounting standards. Tyco ousted Dennis Kozlowski as chief executive in June.
Clear Channel Communications Inc., which dominates the U.S. radio industry, has two convertible bonds worth a total of almost $1.58 billion maturing by April. Its shares would have to rise at least 125 percent in one case and almost quadruple in the other to avoid a cash payment.
The company plans to use part of its $3.3 billion bank credit lines to repay the bonds, Randy Palmer, vice president for investor relations, said in an e-mail.
Selling Stakes
Besides selling bonds that can be converted into their own shares, some issuers have sold debt that can be exchanged for stock of other companies they hold.
Vivendi Universal SA is on the hook for 3.46 billion euros next year. It has 1.8 billion euros of bonds exchangeable its utility unit's shares that investors can demand be repaid in March. Another 1.44 billion euros of bonds, due July, are exchangeable for stock of British Sky Broadcasting Group Plc.
Shares of the world's second-largest media company plunged 43 percent this week, falling as low as 8.94 euros yesterday, amid concern it's running out of cash to make debt payments coming up even sooner.
``I do have some doubts about Vivendi's ability to roll over its debt,'' said Nathalia Barazal, a convertible bond fund manager at Cyril Finance in Paris.
Lagardere's bonds are exchangeable for shares of T-Online International AG, which have fallen about 20 percent this year. ``We can reasonably hope markets will bounce back'' by the end of next year, said Sellier, the treasurer. ``We have a strong balance sheet and unused credit lines -- everything we need to meet any cash obligations.''
Hutchison Whampoa
Hutchison Whampoa Ltd., controlled by billionaire Li Ka- shing, raised $5.66 billion in 2000 and 2001 selling bonds exchangeable for Vodafone Group Plc stock. It will have to repay by January 2004 unless Vodafone's shares triple.
``We are fully aware of our obligation and we stand by the terms of the issue,'' said Nora Yong, a spokeswoman for the company.
The prospect of a cash repayment can hurt a company's share price, further reducing the chances the bonds will be converted into stock. Havas SA fell almost 7 percent on Wednesday on concern the advertising company will have to seek additional financing to repay $1.2 billion of convertible bonds in 2006.
Companies that can't pay can try to persuade investors to hold on to their bonds.
In December, Comcast Corp. avoided being forced to repay $1.1 billion of zero-coupon convertible bonds by adding another date a year later on which investors could opt to sell them back to the company.
William Dordelman, Comcast Corp.'s vice president of finance, expects bondholders will seize their chance to force repayment this December and has earmarked part of a $12.8 billion bank credit to repay bondholders.
``It was cheap debt but we're coming to the end of the road,'' Dordelman said. ``I wish it would last longer.''
