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    WorldCom Bond Issuance

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    Aniket Dubey
    The document contains financial information about WorldCom for the years 1994-1997 including revenues, operating income, net income, assets, debt, and key financial ratios. It also includes tables comparing WorldCom's stock performance and financial metrics to industry peers and data on interest rates and bond spreads.

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    WorldCom Bond Issuance

    Uploaded by

    Aniket Dubey
    261 views9 pages
    The document contains financial information about WorldCom for the years 1994-1997 including revenues, operating income, net income, assets, debt, and key financial ratios. It also includes tables comparing WorldCom's stock performance and financial metrics to industry peers and data on interest rates and bond spreads.

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    The document contains financial information about WorldCom for the years 1994-1997 including revenues, operating income, net income, assets, debt, and key financial ratios. It also includes tables comparing WorldCom's stock performance and financial metrics to industry peers and data on interest rates and bond spreads.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    261 views9 pages

    WorldCom Bond Issuance

    Uploaded by

    Aniket Dubey
    The document contains financial information about WorldCom for the years 1994-1997 including revenues, operating income, net income, assets, debt, and key financial ratios. It also includes tables comparing WorldCom's stock performance and financial metrics to industry peers and data on interest rates and bond spreads.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 9

    Exhibit 2

    WORLDCOM ,INC: CORPORATE BOND ISSUANCE


    Stock -Market Response to Recent Telecommunications Deals from Announcement of Deal
    through Closing Date or July 31, 1998, Whichever Is Sooner

    Percentage Change from Deal


    Announcement to Close

    Date Share Industry


    Proposed Transaction Announced Price S &P 500 Index
    Buyers
    Bell Atlantic agrees to acquire NYNEX Deal
    closed August 14, 1997 April 22,1996 +36% +75% +56%
    SBC Corporation will buy Pacific Telesis Deal
    closed April 1, 1997 April 1,1996 +66% +74% +61%
    WorldCom agrees to buy MCI1 Nov 10,1997 +72% +22% +40%
    AT & T will buy cable company, TCI1 24 June,1998 -2% -1% +4%

    Sellers
    MCI agrees to be bought by WorldCom1 Nov 10,1997 +57% +22% +40%
    Ameritech agrees to be bought by SBC1 May 11 1998 +8% +2% +3%
    Exhibit 3
    WORLDCOM ,INC: CORPORATE BOND ISSUANCE
    Selected Financial Information for WorldCom, Inc
    in thousands of dollars, except rations and per share data
    1997 1996 1995

    Revenues $7,351,354 $4,485,130 $3,696,345


    Operation income (loss) 1,098,606 1,844,094 675,144
    Interest expense 319,700 221,800 249,100
    Income(loss) before extraordinary item 383,652 2,188,944 266,271
    Extraordinary item 24,434
    Net income (loss) 383,652 2,213,378 266,271
    Preferred dividend requirement 26,433 860 33,191
    EPS- basic before ex item 0.40 5.50 0.67
    EPS- diluted before ex item 0.40 5.50 0.64
    EPS- basic 0.40 5.56 0.67
    EPS- diluted 0.40 5.56 0.64
    Shares outstanding- basic 898,889 397,890 346,666
    Shares outstanding- diluted 959,816 397,890 402,577
    Total assets 22,389,553 199,631,976 6,656,629
    Long-term debt 6,527,207 4,803,581 3,391,598
    Shareholders' equity 13,509,865 12,959,976 2,187,681

    Debt/total assets 39.7% 34.7% 67.0%


    Quick ratio 0.6 0.6 0.3
    Current ratio 0.8 1.2 0.3
    Asset turnover 0.3 0.3 0.7
    Return on equity 2.8% -17.1% 12.2%
    Return on assets 1.7% -1.1% 4.0%
    1994

    $2,245,663
    66,528
    47,300
    124,013

    124,013
    27,766
    0.48
    0.48
    0.48
    0.48
    315,610
    315,610
    3,441,474
    794,001
    1,827,410

    46.7%
    0.7
    0.8
    0.7
    -6.8%
    -3.6%
    Exhibit 4
    WORLDCOM,INC: CORPORATE BOND ISSUANCE
    WorldCom, Inc, In Comparison with Industry Peer Group

    WorldCom, Inc Telephone, Long Distance


    Price Change
    Latest week(7/31/98) 8.4% 7.1%
    Last 4 weeks 3.7% 3.1%
    Last 52 weeks 47.9% 43.8%
    Year to date (YTD) 60.1% 9.8%
    Change vs. S&P 500
    Latest week(7/31/98) 96% 97%
    Last 4 weeks 105% 105%
    Last 52 weeks 129% 125%
    YTD 145% 99%
    Price ($)
    Latest close(7/31/98) 48.44 50.28
    P/E ratio 242.2 47.9
    Price/book value 204% 339%
    Price/revenue 563% 228%
    Revenue
    12 months ($ mil) 8,864.6 102,861.6
    Fiscal year ($ mil) 7,351.4 99,962.5
    Change last qtr. 47.5% 4.7%
    Change YTD 43.9% 5.9%
    Earnings
    12 months ($ mil) 202.5 5,246.5
    EPS 12 months ($) 0.20 1.05
    EPS fiscal year ($) 0.40 1.27
    Ratios
    Profit margin 2.3% 5.1%
    Return on equity 2.8% 8.3%
    Return on assets 1.7% 4.3%
    Revenue/assets 34% 73%
    Debt/equity 56% 48%
    Interest coverage 3.5 9.3
    Current ratio 0.8 1.0
    Exhibit 6
    WORLDCOM,INC:CORPORATE BOND ISSUANCE
    Recent Movements in Interest Rates

    Yields to maturity in% per annum Jun-98 Jul-10 Jul-17 Jul-24 Jul-31

    Treasury Constant Maturities


    3-month 5.12 5.08 5.15 5.08 5.07
    6-month 5.32 5.23 5.23 5.25 5.21
    1-year 5.41 5.34 5.36 5.36 5.37
    2-year 5.52 5.43 5.46 5.47 5.48
    3-year 5.52 5.44 5.48 5.47 5.48
    5-year 5.56 5.41 5.47 5.47 5.51
    7-year 5.56 5.47 5.54 5.52 5.56
    10-year 5.50 5.41 5.49 5.46 5.50
    20-year 5.80 5.71 5.82 5.79 5.83
    30-year 5.70 5.61 5.71 5.68 5.73
    Composite
    Over 10 years (long term) 5.78 5.69 5.8 5.77 5.81

    Corporate Bonds
    Moody's seasoned
    Aaa 6.53 6.48 6.58 6.56 6.60
    Baa 7.13 7.09 7.17 7.15 7.20
    A-utility 6.98 6.89
    Exhibit 8
    WORLDCOM, INC: CORPORATE BOND ISSUANCE
    Spreads of Corporate Bonds over Comparable Maturity Treasuries
    for Standard & Poor's Bond- Rating Categories

    Industrial Issues (July 31, 1998)


    Rating 1Yr 2Yr 3Yr 5Yr 7Yr 10Yr 30Yr
    AAA 28 34 34 33 31 37 50
    AA 33 37 36 35 34 44 59
    A+ 37 41 39 42 49 56 84
    A 40 43 44 60 60 70 93
    A- 44 51 56 63 68 83 100
    BBB+ 50 58 66 75 82 89 107
    BBB 55 67 71 85 88 100 120
    BBB- 64 76 81 92 99 114 128
    BB+ 82 99 110 127 142 164 149
    Exhibit 9
    WORLDCOM ,INC: CORPORATE BOND ISSUANCE
    Close Prices on July 31, 1998, of Corporate Bonds Issued by
    Telecommunications and Media Companies

    Price Per
    Years to $100 of
    Final Type of Coupon S&P Moody Face
    Company Maturity Security (%) Rating Rating Value
    New Ameri 2 Notes 7.450% BBB- Baa3 102.45
    New Engla 3 Notes 8.630% AA Aa2 107.25
    ATT Grou 3 Notes 5.125% AA Aa3 98.5
    GTE Grou 3 Notes 6.390% A Baa1 100.68
    Century Te 5 Senior Not 6.550% BBB+ Baa1 101.74
    GTE Corp 5 Debentures 9.100% A Baa1 111.85
    News Amer 5 Notes 8.625% BBB- Baa3- 109.12
    WorldCom 6 Senior Not 7.550% BBB+ Baa2 105.75
    MCI Corp 6 Senior Not 7.500% BBB+ Baa2 105.88
    360 Commu 7 Senior Not 6.550% Baa1 103.7
    GTE Corp 7 Debentures 6.360% A Baa1 99.75
    New Ameri 7 Notes 8.500% BBB- Baa3 110.50
    WorldCom 8 Senior Not 7.750% BBB+ Baa2 107.70
    GTE Corp 30 Debentures 6.940% A Baa1 100.56
    Ameritech 30 Debentures 6.550% AA+ Aa3 99.25
    News Amer 30 Notes 7.750% BBB- Baa3 106.63
    From exhibit 9 we see that Worldcom has bond rating of BBB+ by S&P
    From exhibit 8 we see that BBB+ rating has following spread for different year bonds
    Rating 3Yr 5Yr 7Yr 30Yr
    BBB+ 66 75 82 107
    In exhibit 6 YTM of Treasury is given
    BBB+ 5.48 5.51 5.56 5.73
    So YTM for Worldcom will be as follows
    6.14 6.26 6.38 6.8

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