Re: Alex Beam column

[Dan Strassberg <dan.strassberg@worldnet.att.net>]

At 02:01 PM 6/5/99 -0400, you wrote:
>Mark Shneyder writes:
>>They're about to go public with an IPO to get
>>themselves out of  a heavy debt and cover operational
>>losses they'be been suffering in the past two years.
>>They already lost over a million in the first qtr of this year.
>>WEZE and other underperforming Salem properites were
>>placed in a trust a couple weeks ago which probably
>>means a quick firesale once the IPOs hit the Street...
>
>Doesn't this totally fly in the face of what we have heard about
>Salem: financially conscious, good at managing their properties,
>et al. Anyone care to comment?
>
Well, I was probably the source of the stories about Salem's good financial
manangement. In my daily perusal of FCC actions I've noticed no record of
Salem properties being transferred to a trust, but I've been known to miss
such hot items. If Mark is correct, I was wrong. Even before I read Mark's
post, I tried to obtain a "red herring" prospectus on Salem's IPO from the
underwriter, Alex Brown & Co, but I was told to call back on 6/21. I did
find a Web database that contains a record of a Salem debt offering (I can't
recall whether it was preferred stock, a convertible bond, or a straight
bond) and I have no idea when the securities were originally issued. The
issue date would have a strong effect on the coupon, which, if I recall is
9-5/8%. With Treasury paper at around 6%, a bond being sold at par today
with a 9-5/8% coupon would be considered real junk. But this bond was
probably issued when rates were higher and might now be selling at a
premium. If so, Salem's credit rating is not necessarily that bad.

Salem's new ticker symbol will be SLC. I had always thought that
three-letter ticker symbols were reserved for companies listed on the NYSE.
An NYSE listing would suggest that the company is in better financial shape
than Mark suggests.

- -------------------------------
Dan Strassberg (Note: Address is CASE SENSITIVE!)
ALL _LOWER_ CASE!!!--> dan.strassberg@worldnet.att.net
(617) 558-4205; Fax (617) 928-4205

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