Telcordia $300 million bonds canceled over disclosure issue

By Paul A. Harris

St. Louis, March 9 - Telcordia Technologies Inc.'s $300 million issue of senior subordinated notes due March 2013 (B3/B-) was canceled Wednesday, the day it was scheduled to close, according to market sources.

According to a high-yield buyside source, bookrunner JP Morgan canceled the deal because of questions about the company's compliance with a "material adverse conditions" clause.

"JP Morgan said that all trades had been canceled due to material adverse conditions," the source said. "My understanding is that the company did not disclose what those conditions were, and JP Morgan told them if they did not disclose those conditions the deal is canceled.

"This is rare, and I've never heard of a deal being canceled due to a disclosure issue. The deal will be wiped off the books as though it never took place."

Telcordia Technologies, a Piscataway, N.J., telecommunications software company, priced its $300 million issue on Feb. 25.

JP Morgan, Bear Stearns & Co., Deutsche Bank Securities and Lehman Brothers were joint bookrunners for the Rule 144A notes, which do not have registration rights.

The issue was downsized from $350 million, with $50 million having been shifted to Telcordia's term loan B.

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