079 50 WCOM
7901 US USS TEL TLS TEC NET
www.FirstKnow.It: Worldcom's credit is heavily overated

www.FirstKnow.It: Worldcom's credit is heavily overated

www.FirstKnow.It is currently highlighting Worldcom as being heavily
overated at A3/BBB+.  With total liabilities exceeding $43 billion, an equity
capitalization of just $20 billion (down 66% from over $60 billion 12 months
ago) and 40% p.a. volatility of its underlying asset base, www.FirstKnow.It
estimates a 60% probability of default and 26% expected loss within 12
months.  A 12 month $1MM debt exposure is estimated currently to have an EEP
(Equity Equivalent Position) of $250,000 invested in Worldcom's listed
equity."

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www.FirstKnow.It produces credit analysis on US, UK and German companies
based on company stock prices.  Using an options model, default is
characterised as exercise of a put option - the debtor puts its assets on the
creditors in settlement of its debts.  Value the put option and you value the
credit risk.  www.FirstKnow.It evaluates the put option and also calculates
the EEP (Equity Equivalent Position) which provides "the greeks" into
companies' listed equity enabling credit risk to be understood in terms of
equivalent equity exposures.  The proprietary PDF (Prospective Default
Frequency) measure provides probabilities of default.  Trial subscriptions
are available for qualified buy-side professionals.

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         For additional information please contact Audrey Ploger at
                    Hoenig & Co., Inc. on (914)933-3218.
                       Independent_Research@hoenig.com
                                www.hoenig.com

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