By Industry Telcos having a rough time in capital markets By Jim Regan 10 October 2000 Regional telecom companies, like their Western counterparts, haven't fared too well in the capital markets of late. Telecom companies still need a lot more capital, be it to secure 3G licenses in auctions or build out and upgrade their networks and services. The problem is investors are no longer so keen on telecom shares or bonds, particularly the riskier ones, and banking regulators are getting concerned about the high level of certain banks' loan exposures to the sector.
Investors are more selective in terms of what they want to buy.
For Asia, this was borne out last week in fund-raisings by Asia Global Crossing and, to a lesser extent, Globe Telecom. The joint bookrunners handling the issue, Goldman Sachs and Salomon Smith Barney, agreed to subscribe for 7 million apiece on their own accounts, the strategic investors will buy 19.7 million and Asia Global Crossing Chairman Gary Winnick is buying a couple of million. In the event, neither Goldman Sachs nor Salomon Smith Barney has had to take up any shares. In addition, Asia Global Crossing will be cutting back on its investment budget. The decision to keep both the size and pricing of the offering at a modest level reflects both investor caution towards telecoms stocks as well as negative sentiment towards the Philippines.