Verizon outlined series of interim funding and ‘credit enhancemen...
Verizon outlined series of interim funding and “credit enhancements” for Genuity Thurs. that total $2 billion. Verizon said financing agreements were in line with FCC order approving Bell Atlantic-GTE merger last June. Verizon bolstered its credit agreement with Genuity,…
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increasing principal amount that Genuity may borrow to $900 million from $500 million. It also extended to Dec. 31 maturity date of all borrowing under credit pact, from original date of May 31. It’s furnishing Genuity with credit enhancements that will provide access to long-term capital sources with maturities of up to 5 years. In joint statement, Verizon co- CEOs Charles Lee and Ivan Seidenberg said recent FCC approval of company’s application to sell long distance in Mass. moved company “one step closer to clearing the necessary regulatory hurdles that will allow us to bring Genuity back into the Verizon family.” They said: “Genuity is facing the same challenges that many other companies are experiencing due to the economic slowdown and this support gives it additional financial stability to strengthen its ability to grow and compete.” Genuity also reported first-quarter results, disclosing plans to trim its work force 12% (more than 600 employees. Chmn.-CEO Paul Gudonis said company hit its revenue and earnings targets. But he said: “We have seen enterprise customers extend the time to make buying decisions as they justify the return on investment associated with their IT spending plans. This has resulted in slower new order growth in the current period.” Genuity said revenue was up 20.8% in first quarter to $299.5 million but net loss deepened 39% to $291.3 million. Domestic revenue from AOL dropped 20% from year-ago period and was flat with 4th quarter of last year. Genuity attributed trend to contractual price reductions reached late in 1999 that took effect Sept. 1. It said total AOL revenue now made up 32% of its total, down from 46% year ago.