WSJ: Telecom-Sector Debt May Claim More Victims

About $306 billion in telecom and cable-industry related debt was outstanding at the end of 2002, according to Standard & Poor's figures quoted by The Wall Street Journal. What is worrisome about the number is that about $63 billion (21%) of the debt comes due by the end of 2005 and prospects for refinancing by some of the most heavily indebtbed players looks dubious. Already, 74 telecom concerns have defaulted on $112.6 billion in debt since 1999. S&P expects more defaults. The Wall Street Journal warns that the next big crunch could occur just as MCI emerges from bankruptcy, raising the additional worry of a new telecom price war.
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