Pacific Century CyberWorks (PCCW) has declined to comment on reports its fixed line telecommunications unit is preparing a US$2 billion bond issue as part of a debt rescheduling exercise.
Funds raised from the potential bond issue are expected to help repay US$4.7 billion in bank loans, according to reports.
However some analysts said if the bond issue went ahead they would be surprised if it was used for repaying the bank loans.
'I'm not so sure if that's true because the debt is getting cheaper as the rates are coming down - the interest costs are much less than they were six months ago,' said SG Securities Internet analyst Jonathan Iu.
Interest rates in the United States have been cut sharply this year amid fears of a recession.
Another analyst said the funds would be used for expansion as CyberWorks management was aggressive but did not have the money for investment after servicing its debt. 'It's got strong cash flow but the banks have put some pretty strong covenants on that cash flow,' the analyst said. 'They're probably looking for more cash upfront.'
