Global Crossing Pushes On

High-profile telecom issuer Global Crossing is stepping up plans to expand its Pan European Crossing system to 40 cities by the end of next year - 16 more than had been officially announced. Cities in Spain, Italy and Eastern Europe are the most likely candidates for the expanded European service.

The Pan European Crossing network is currently on track for 19 cities by the end of the year, and by the middle of next year it should be up and running in 24 cities. Company officials declined to elaborate further about Global Crossing's plans.

Analysts, however, said that such an expansion could easily entail a new bond issue for financing, but also noted that the company has other capital options as well, including equity and bank loans, so that if there is a bond issue, it may not be all that big.

To be sure, administrative agent Chase Manhattan and syndication agent Goldman Sachs have launched general syndication on June 2 of a $3 billion credit facility for Global Crossing Ltd. Arrangers on the deal are Citibank, Merrill Lynch, CIBC Oppenheimer and Deutsche Bank.

The facility comprises a five-year $1 billion revolving credit, a five-year $1 billion A-term loan and an eight-year $1 billion B-term loan. Institutions are promised 25 basis points for minimum commitments of $10 million.

In March, just two weeks into his new job as chief executive at Global Crossing, Robert Annunziata announced an acquisition of Frontier Corp., a bigger, investment-grade issuer, for $12.5 billion in stock and assumed debt. Global's debt received an upgrade, sources said, to the point that one issue is split rated, with the other being a stronger BB credit.

Frontier, the fourth-largest long distance company in the U.S., gave Global a strong domestic presence to complement its international operations.

On the news of that deal, which essentially gave Global a $30 billion market value and annual sales of about $4 billion, Global's outstanding debt jumped to 112 from 105, investors said. Once complete, which is expected by the third quarter, the Frontier acquisition will give Global a combined network connecting 159 cities around the world

Annunziata was named to the top spot at Global, after being AT&T's president of business services. He joined AT&T when the giant telecom firm bought Teleport Communications, where he was chief executive officer. - Lee Conrad and Chris Miller