About $10 million of Lucent Technologies' bank debt traded up to 95 last week, with dealers citing increasing confidence in the company's performance. "People are just more confident that they're going to do what they say," a trader noted. The Murray, N.J.-based company is one of the leading manufacturers of technology equipment. Frank D'Amelio, cfo, referred calls to Michelle Davidson, spokeswoman.
The company has already cut $3 billion of its $4 billion total reduction plan, said Davidson, who added that Lucent has improved working capital by $3 billion and reduced head count by 10,500. "We're in the midst of executing financing actions to take liquidity issues off the table," she said. The company is now entering phase 2 of its plan, including eliminating $2 billion in expenses, reducing working capital by an additional $1 billion and reducing its capital expenditure rate by $750 million. An additional 10,000 to 15,000 in headcount reductions is also planned. Market players have noted that Lucent Technologies was affected by the hit to the CLEC market. On Aug. 16, the company amended its credit facility, which allowed it to pursue phase 2 of its strategic plan. "Our restructuring is driven by market conditions and a new business model," said Davidson. "Our strategy now is focusing on the world's largest service providers."
Lucent has a $6.5 billion revolving credit that expires in next year. Pricing ranges from 15/ 8% over LIBOR to LIBOR plus 21/ 2%. J.P. Morgan, ABN-AMRO, Morgan Stanley, Citibank, Deutsche Bank and Socie´te´ Ge´ne´rale are the lead arrangers.