WorldCom loses accounts receivable securitization program and defaults on credit facilities

By Sara Rosenberg

New York, July 1 - WorldCom, Inc. said its $1.5 billion accounts receivable securitization program was terminated and the company received notice from lenders that defaults occurred on the existing credit facilities.

Due to the loss of the accounts receivable securitization program, the company cannot sell any new accounts receivable into the program. Collections on accounts receivable will be used to pay down about $1.2 billion outstanding under the program, the release said.

Due to defaults under the $2.65 billion and $1.6 billion bank loans, lenders holding 51% of the $2.65 billion facility are permitted to vote on the acceleration of the repayment date of the loans, the release explained.

"These notifications were anticipated," said John Sidgmore, president and chief executive officer, in a news release. "We are engaged in discussions with lenders regarding replacement facilities and remain optimistic that our good working relationships will ultimately reach a positive resolution."

Furthermore, the Clinton, Miss. telecommunications company received a delisting notice from Nasdaq, effective July 5, but the delisting can be stayed if the company requests a hearing.

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