Nortel sold $2-billion of high-yield bonds in July to, in part, retire a $1.3-billion bank credit facility. Gimme Credit said the 10-year bonds with a yield of 10.5% are pretty attractive to investors. “With ample near term liquidity, this bond looks interesting for aggressive accounts seeking yield, but we will need to reasses this name on a regular basis given our concern about fundamentals”. Gimme Credit estimates Nortel will generate negative free cash flow this yar after accounting for more than $1-billion of interest expenses, capital spending and pension funding.
Gimme Credit Likes Nortel Bonds
Nortel sold $2-billion of high-yield bonds in July to, in part, retire a $1.3-billion bank credit facility. Gimme Credit said the 10-year bonds with a yield of 10.5% are pretty attractive to investors. “With ample near term liquidity, this bond looks interesting for aggressive accounts seeking yield, but we will need to reasses this name on a regular basis given our concern about fundamentals”. Gimme Credit estimates Nortel will generate negative free cash flow this yar after accounting for more than $1-billion of interest expenses, capital spending and pension funding.