Riding the ConvertibleSince last month's Detox piece, The Wall Street Journal has reported that the company is thinking of raising cash by doing a large issue of securities that convert into Tyco stock. In another report, the paper said that the Securities and Exchange Commission, which is probing Tyco's books, is taking another look at the accounting for a large acquisition done in 1998. In a previous investigation from 1999 to 2000, the SEC reviewed the deal, but the agency only recently acquired new documents relating to it, prompting this second examination, the Journal reported. Tyco critics have long said the earlier probe was insufficient and claims
Housecleaning spurs Tyco
Reports of the convertible debt deal had Tyco raising as much as $4 billion before February, when $3.9 billion of bank debt comes due and when holders of a convertible bond issue can demand repayment of $2.3 billion in stock or cash. News of the new deal was received positively, but it's hard to see why.