GTE slow to join telephone industry refinancing rush: cost of calling its many small bonds often outweighs interest savings

Article Abstract:

GTE Corp has been slow to take advantage of the low interest rates available today to refinance outstanding high-coupon bonds. The country's biggest local telephone company has 25 issues, for a total of nearly $1.5 billion, of regional telephone-company bonds that can be recalled from holders receiving interest coupons of 9 percent or more per year. One reason for GTE's slowness may be the focus the company is putting on raising its Triple-B bond rating from Standard and Poor's to the A level rating from other credit agencies. Obvious candidates for immediate recall are $385 million in six subsidiary issues paying 10 percent interest or better. Telephone executives assume it will cost at least 1.5 percentage points to recall and refinance bonds. In contrast, other telephone companies, including Nynex Corp, Pacific Telesis Group, AT and T and MCI Communications Corp, have been much more aggressive in refinancing high-interest debt.

Telephone and telegraph apparatus, Telecommunications services industry, Telecommunications industry, Interest rates, Securities, GTE Corp., Bonds (Securities), Bonds

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Firms can tap long-distance phone service deals

Article Abstract:

A proliferating array of new long-distance telephone services means that careful small-business users can save 10 percent to 30 percent on their bills. Those who find the range of offerings bewildering can turn to phone consultants or auditors. Tele Choice Consulting Pres Jeffrey Kagan advises small organizations to look for hidden offers, ask for bids on long-distance services, consider consolidating phone billings, insist on being billed on six-second or even one-second intervals, and shy away from 800 contracts lasting more than 12 months. Consultant Ellis Delgado of DEKA Communications points out that many regional Bell phone companies encode their monthly charges, making it almost impossible for the untutored to spot mistakes.

Finance, Column, Long distance telephone services, Long-distance telephone service, Cost control, Cost of Communications, Guidelines, Cost Reduction

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