The merger between U S West and Global Crossing is proving to be one of the more interesting deals Wall Street has seen in a while. Bondholders of U S West and Frontier, which also is slated to merge with Global Crossing, were feeling the pinch as well. And there's a suspicion that tracking stocks don't perform as well as independent companies. But the question of which company is doing the buying and which is doing the selling is only part of the drama that's unfolding. The ability of both Frontier and U S West to pay their debts will be hurt if the Global Crossing deal goes through, so their bonds are worth less than they were before the deal was announced and ratings agencies expressed their concerns.
Some institutions limit themselves to investment-grade bonds.
Contrary to some expectations, U S West's initial purchase of 9.5 percent of Global Crossing will not raise any new money for Global Crossing's coffers. Depending on how many shareholders wish to sell, Global Crossing Chairman Gary Winnick and other insiders will retain between 70 percent and 95 percent of their holdings. Then subscribe to the IAW E-Mail Alert. Openwave Be a part of the communications revolution. 810, the high-tech dream machine.