Nortel Unveils Debt Details

It looks like Nortel had to pay through the nose to complete its $2-billion debt offering. It plans to issue three different notes: $450 million due in 2016 paying 10.75% a year, $550 million due in 2013 paying 10.125%, and $1 billion of floating rate notes due in 2011, paying three-month LIBOR plus 4.25%. Bottom line: the deal reflects higher long-term interest rates and a “sweetner” Nortel had to offer investors to buy into the offering.

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