contracts and survivability of telecom sector

Valdis.Kletnieks at vt.edu Valdis.Kletnieks at vt.edu
Mon Oct 6 23:16:37 CDT 2008


On Mon, 06 Oct 2008 23:45:15 EDT, Patrick Giagnocavo said:

> If you assume for example, that Verizon has notes of 10-year terms, then
> (if the notes are spread evenly) they will need to borrow some $4Billion
> in the next 12 months.

Close but no cee-gar.

They'll need to come up with $4B to pay off the notes.  There's no requirement
that they borrow to do it.  They can do it out of their revenue stream, for
instance, just like most people who have to make a mortgage payment will do so
out of their paychecks, rather than borrowing to do it (and in fact, if a
person or company is relying on borrowing to pay off previous debt, that's a
Bad Sign).

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