A recent tender offer for two types of subordinated notes helped Cox
Communications Inc. to reduce its total debt obligation by about $780 million,
prompting one industry analyst to boost his price target on the Atlanta-based
On June 4, Cox completed a tender offer for its 2% exchangeable subordinated
debentures due in 2029 (also called PRIZES) and 3% exchangeable subordinated
debentures due 2030 (also called PHONES).
According to a report Friday by UBS Warburg LLC cable debt and equity analyst
Aryeh Bourkoff, Cox accepted for payment $1.257 billion of the original
principal amount of PRIZES and $274.9 million of the original principal amount
Bourkoff wrote that Cox paid an aggregate of $755.1 million for PRIZES and
PHONES, representing a 50% discount to their face value. By retiring that debt
early, the MSO simplified its capital structure and lowered its
second-quarter-2003 estimated leverage to about 3.5 times cash flow.
"We believe this refinancing activity is accretive to stockholders, adding
approximately $1 per share to Cox's equity value," Bourkoff wrote. He increased
his 12-month price target on the stock from $38 per share to