r
r
r
August 21, 2001 — (WEB HOST INDUSTRY REVIEW) — Flag Telecom (flagtelecom.com), a leading, London-based network services provider and independent carriers’ carrier, yesterday announced that Flag Asia Limited has secured financing for Flag North Asian Loop (FNAL) of up to $300 million under a syndicated credit facility, arranged by Westdeutsche Landesbank Girozentrale, New York (westlb.de).
r
r
“To ensure the project was executed on a fast track, we initially funded
r
FNAL completely from our own cash resources and presale proceeds from
r
Level3,” Ed McCormack, COO of Flag Telecom, said in a statement. “The
r
facility therefore releases some of our own funding that we had previously
r
committed to the project. As a result, we have increased our cash resources
r
to support future initiatives and to enhance liquidity in 2002 and beyond.”
r
r
“The development of FNAL has been an important part of our network expansion
r
plan and a major step in our strategy to develop a low-cost, scaleable
r
global IP network,” he continued. “FNAL will be a market leader, offering
r
capacity to the Asian regional markets and leveraging our substantial
r
operational experience in the region.”
r
r
The credit facility has been syndicated to international banks and is a 6
r
1/2 year project financing term facility at an interest rate of LIBOR plus
r
between 225 to 325 basis points on drawn amounts. Under the terms of the
r
facility, Flag Telecom Holdings Limited will lend up to $100 million to its
r
subsidiary, which will be reduced if further external lenders are brought
r
into the syndicate group. Westdeutsche acted as lead arranger,
r
administration and security agent and Royal Bank of Scotland acted as
r
documentation agent.
r
r
FNAL is the six fibre pair, multi-terabit, intra-Asian system being
r
developed in association with Level3 Communications, Inc. (level3.com)
r
announced in January this year. The Eastern leg of the system, linking Hong
r
Kong to Japan, was developed by Level3 and was commissioned in June.
r
City-to-city services between Hong Kong and Tokyo were initiated this month
r
and the Taiwan spur on this leg is progressing to schedule. Work on the
r
Western leg of the system, being developed by Flag Telecom and connecting
r
Hong Kong, Korea and Japan, is also progressing to schedule and in June it
r
was announced that an agreement had been reached with Korea Telecom to build
r
and operate the landing station at Pusan, Korea.
r
r
The fit out of PoPs in the cities served by the system and the establishment
r
of backhaul connections are in progress, with completion expected next year.
r
Flag Telecom will manage and operate the entire system once integrated. FNAL
r
will be more than 10,000 route kilometres in length and Flag Telecom and
r
Level 3 will each have three fibre pairs on the system. FNAL uses
r
state-of-the-art DWDM technology and is expected to offer a maximum capacity
r
of 2.5- 3.8Tbps. This terabit technology is combined with SDH/SONET
r
networking to provide customers with seamless city-to-city connectivity.
