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January 3, 1988

BETTER PROFITS AT MCI PERSUADE IBM TO EXTEND LINE OF CREDIT

By CBR Staff Writer

MCI Communications Corp, the Washington company 16.3%-owned by IBM, says that recent improvements in its profits mean that IBM will extend the standby line of credit that was opened for its benefit. IBM has amended its standstill agreements with MCI to extend for one year MCI’s option to sell debentures or preference shares to raise capital. The standstill agreements stem from MCI’s 1985 acquisition of the formerly majority IBM-owned Satellite Business Systems. The extension gives MCI the right to sell up to $300m of convertible debentures or convertible preference shares between now and the end of the year, and the option to sell an additional $100m of securities to IBM during that period. IBM in turn has agreed to hold on to its 47m MCI shares at least until January 1, 1990.

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