The slide in Global Crossing debt continued last week in the wake of the company's Oct. 4 earnings warning and management shuffle. The benchmark long haul communications provider saw bids on its 9.5% senior notes of '09 (Ba2/BB-) sink to 15 last Thursday, down from 21 the previous week. "There have been several downdrafts in the [high-yield wireline telecommunications] sector over the past year, but this latest downdraft since Sept. 11 has been more severe than others, and we think it represents real capitulation," says Trent Spiridellis, analyst at Banc of America Securities. He says "slowing demand for data services, shrinking budgets for capital expenditures, customer churn, soft wholesale demand and the company's general unwillingness to do business with competitive carriers" were among the factors contributing to Global Crossing's earnings miss, and the decline of the sector as a whole.
Global Crossing Plummet Continues