Sunday tests investors' faith

Hong Kong mobile phone operator Sunday Communications has mandated Credit Suisse First Boston and JP Morgan for a first high- yield bond offering.

Hong Kong mobile phone operator Sunday Communications is hoping to raise $300 million this autumn, in what should prove an interesting test of investors' willingness to absorb paper from a company that is not projected to turn EBITDA positive until the first quarter of 2002.

High-yield bond offerings from telecommunications companies in the build-out stage of their development have already proved very popular in Europe and accounted for 50% of all issuance during 1999. Typically cut off from the bank market because the sector typically returns negative operating cashflow and start-up losses in the early years, such issues have, by contrast, been lapped up by fixed income investors focused on longer-term potential....

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