Tyco plans debt repurchase

With its stock battered by accounting fears, Tyco International has announced a plan to repurchase all of its $4.5 billion in commercial paper at its scheduled maturities. To fund the purchases, the company will draw upon $5.9 billion in bank facilities.

The move is expected to reduce Tyco’s earnings per share for fiscal 2002 by as much as 2 cents. According to the company, it should enhance Tyco’s flexibility, liquidity and eliminate “uncertainty about our ability to finance our recently announced plan,” to split into four separately traded companies.

The move was greeted harshly by traders, who have sent Tyco’s stock price down more than 50% since the beginning of the year amid Enron-induced fears that the company’s accounting practices are too aggressive.

--Toby Weber, staff writer