CHICAGO, June 26 (Reuters) - Tellabs Inc. has no interest in using convertible bonds to build its cash position, the telecommunications equipment maker's chief financial officer said on Thursday.
"We've looked at the current frenzy in the market place around convertibles," Timothy Wiggins said at a William Blair & Co. conference in Chicago. "At the end of the day, we're saying we don't see a need to do that and we don't want to put debt on the balance sheet."
Many companies view convertibles, which are stock-bond hybrids, as a cheaper way to raise money than by issuing regular bonds, and without issuing new stock.
More than 50 issuers, led by General Motors Corp. , are expected this month to sell convertibles in U.S. markets, a record number, according to Morgan Stanley's ConvertBond.com.
Wiggins said Tellabs still need to cut costs, but he believes the balance sheet provides the necessary flexibility and there is no need to potentially dilute shareholders' holdings with a convertible debt offering. Tellabs has about $1 billion in cash and no debt.
The Naperville, Illinois-based company in April posted a first-quarter net loss of almost $43 million as sales slid 40 percent from a year ago. It also cut 665 jobs, or 14 percent of its work force, and said more cuts are possible. (Additional reporting by Jonathan Stempel in New York)