Qwest, Charter, Loral lead $19 billion telecom debt facing difficult refinancing, S&P says

New York, April 21 - Qwest Communications, Charter Communications Inc. and Loral Space & Communications Ltd. top the list of $19 billion of junk-rated telecom debt that matures over the next three years and faces refinancing prospects that range from "worrisome" to "highly doubtful," according to a new report by Standard & Poor's.

Out of the total, Qwest makes up $6 billion, Charter $1.5 billion and Loral $1.1 billion, S&P noted.

To meet the maturities, Qwest must complete sale of its directories business while Charter must address performance concerns such as stemming basic subscriber losses, profitably deploying new services and resolving legal issues, according to the rating agency.

In total $63 billion of telecom and cable debt from U.S. companies matures through 2005 out of the total $306 billion outstanding, S&P said. Just over two thirds is from investment-grade companies, much of it from three of the four regional Bell companies (excluding Qwest), AT&T Corp. and some of the major wireless companies.

For these issuers, refinancing should be "relatively perfunctory," S&P said.

"But for the remaining $19 billion of speculative-grade debt coming due through 2005, most of which is in the B rating category, refinancing prospects range from worrisome to highly doubtful," the rating agency warned.

Most precarious, S&P continued, are companies rated at the CCC level, even if they have sizable cash balances.

It believes such issuers have few options but may be able to renegotiated bank debt maturities, sell non-core assets, buy back their debt in the open market or carry out debt-for-debt or debt-for-equity exchanges.

Part of the problem for high-yield telecom companies is the tight market for new issues - the reverse of the enthusiasm for the sector in the 1990s, S&P noted.

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