CSC Wins Waivers On Penalties For Bond DefaultCSC Wins Waivers On Penalties For Bond Default

Outsourcer Computer Sciences Corp. said Thursday that it has successfully completed its solicitation for a waiver of penalties associated with a bond issue on which it defaulted.

CSC was seeking the waiver from holders of the $200 million outstanding on its 6.25% notes due 2009. CSC defaulted on the terms of the issue when it failed to file its quarterly report for the fiscal first quarter ended Sept. 26.

The company said it delayed filing due to an internal probe into the financial impact of its stock options program. CSC said it received a notice of default from bond trustee Citibank NA on Dec. 8.

In exchange for waiving default action, CSC offered bondholders $1.25 for each $1,000 held in principal on the notes. It will pay an additional $1.25 per $1,000 held if it fails to file its quarterly report by Jan. 5. The consent solicitation expired on Dec. 21.

Fitch Ratings last week placed CSC on rating watch negative as a result of the default.