AT&T Canada to miss coupon payments

New York, Sept. 11 - AT&T Canada Inc. said it will not make $47.8 million of bond coupon payments due on Sept. 15 and C$5.4 million due on Sept. 23.

The Toronto, Canada telecommunications company has 30 days before the non-payment becomes a default.

Affected by the decision are $38.25 million due Sept. 15 on its $1 billion of 7.65% notes due 2006, $9.53 million due Sept. 15 on its $250 million 7.625% notes due 2003 and C$5.4 million due Sept. 23 on its C$150 million 7.15% notes.

AT&T Canada said restructuring discussions are continuing with its bondholders, bank syndicate and AT&T Corp.

"We view a consensual restructuring as achievable and in the best interests of all of our stakeholders. AT&T Canada's business continues to be strong, and it remains business as usual with our customers and suppliers as we continue to provide state-of-the-art telecommunications services," said David Lazzarato, AT&T Canada's executive vice president and chief financial officer, in a news release.

The company said it had C$400 million of cash on hand at Aug. 31 and expects to receive a further C$240 million from the exercise of employee stock options upon the closing of the back-end transaction with AT&T Corp.

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