A few years ago our local phone company, GTE Hawaiian Tel, became a Verizon clone. Now it's being sold again to the Carlyle group as "Hawaiian Telcom", which is financing the purchase with junk bonds. Here's the press release:
"Hawaiian Telcom Communications, which will be the state's dominant phone company after parent Carlyle Group completes its purchase of Verizon Hawaii, is selling $550 million in junk bonds to fund the acquisition.
The notes, with due dates in 2013, will be sold to investors outside the United States, and proceeds will pay for Carlyle's purchase and related expenses, Hawaiian Telcom said yesterday.
The notes will be priced April 26, according to Bloomberg News, which cited a person familiar with the transaction.
The notes have not yet been rated by Moody's Investor's Service or Standard & Poor's, Bloomberg said, though they will have high-yield, high-risk investment ratings.
Carlyle and Verizon announced Friday they had amended terms of the deal to comply with restrictions mandated by the state Public Utilities Commission.
The commission still must sign off on the amended terms. The deal is expected to close early next month."
My question-- what's the significance of not making this available to U.S. investors? How bad do the junk bonds have to be before they won't be touched by American investors? I doubt that the bond payments can be handled without rate increases on the current cash flow... guess I'd better pay more attention to that cell phone thread.
"Hawaiian Telcom Communications, which will be the state's dominant phone company after parent Carlyle Group completes its purchase of Verizon Hawaii, is selling $550 million in junk bonds to fund the acquisition.
The notes, with due dates in 2013, will be sold to investors outside the United States, and proceeds will pay for Carlyle's purchase and related expenses, Hawaiian Telcom said yesterday.
The notes will be priced April 26, according to Bloomberg News, which cited a person familiar with the transaction.
The notes have not yet been rated by Moody's Investor's Service or Standard & Poor's, Bloomberg said, though they will have high-yield, high-risk investment ratings.
Carlyle and Verizon announced Friday they had amended terms of the deal to comply with restrictions mandated by the state Public Utilities Commission.
The commission still must sign off on the amended terms. The deal is expected to close early next month."
My question-- what's the significance of not making this available to U.S. investors? How bad do the junk bonds have to be before they won't be touched by American investors? I doubt that the bond payments can be handled without rate increases on the current cash flow... guess I'd better pay more attention to that cell phone thread.
