AST Research Cancels Plan to Issue Bonds

AST Research Inc. of Irvine said increasing interest rates and weakening market conditions have caused it to cancel plans to issue $50 million in bonds to finance future expansion projects.

AST, which manufactures its own line of IBM-compatible personal computers and other computer products, said it has withdrawn its May 8 registration statement with the Securities and Exchange Commission for the sale of convertible debentures, a type of corporate bond that is convertible into common stock.

Company spokesman Bob Maples said AST decided against selling the bonds largely because of the recent rise in interest rates, which would require AST to offer a higher rate of return to bond purchasers.

Maples said AST has no long-term debt and will rely on cash on hand and alternative sources of funds for any expansion projects it undertakes in coming months.