Telecom Bonds Continue to Slide

Market prices of WorldCom Inc.’s actively traded bonds fell further Wednesday, and investors’ worries about the telecom industry dragged rival AT&T; Corp.’s bonds down as well.

WorldCom’s 8.25% bonds maturing in 2031 fell to a record low of $41.16 per $100 face value, down from $43.71 on Tuesday and $55.31 a week ago.

The annualized current yield on those securities now is 20%--assuming WorldCom continues to pay interest at the 8.25% rate.

AT&T;’s 6.5% bonds maturing in 2029 slid to $71.90 per $100 face value, down from $74.22 on Tuesday and $79.19 a week ago. That put the current yield on the bonds at 9%.

Another AT&T; issue, 8% bonds maturing in 2031, fell to $84.64, pushing the current yield to about 9.5%.

“AT&T; [bonds] had held up relatively well” until recent days, said Patricia Lee, an analyst for fixed-income research service CreditSights Inc. But with WorldCom’s perceived problems, more investors now “want to lighten telecom exposure,” she said.

AT&T;, the No. 1 U.S. long-distance telephone and cable television company, last week posted a $975-million first-quarter net loss and said revenue fell 11% amid stiff competition and reduced spending by its customers.

Although its bonds lost value Wednesday, AT&T; shares rose 84 cents to $13.96 on the New York Stock Exchange.

Investors still snapped up a new securities offering from one telecommunications firm, rural telephone service provider Alltel Corp. The company sold $1billion in three-year securities that are automatically convertible into company stock.