Cable & Wireless Optus closed an issue of US$350M of senior unsecured guaranteed notes through a private placement to institutional investors in the United States on Thursday 1 July.

The notes carry a coupon of 8 1/8% in US$ and the company has swapped the notes back to Australian dollars.

The issue was marketed to a limited number of institutional investors through a series of one on one presentations in several cities throughout the United States over four days. The offering document was also made available to those selected investors electronically via Bloomberg.

Investor response was extremely strong, with over 75 institutions participating in the marketing program. Allocations were made to 20 investors.

According to Chief Financial Officer, Norman Gillespie, the debt issue is an important strategic step for the company, and represents another stage in the development of Cable & Wireless Optus.

"From a highly leveraged unlisted company just 12 months ago we are now a well capitalised publicly listed company".

Commenting on the quality of the investors, Mr Gillespie said: "We are delighted that we have been able to attract such a high quality investor base. This was the key element of our strategy for this debut bond offering and it establishes a superb platform for all future issues.

"With bank funding in place until 2001, there was no pressure to do this deal, but it made strategic sense," said Mr Gillespie.

"The ten year financing provides a greater balance to our debt maturity profile, which now comprises a mix of bank debt and capital markets debt and it also provides financing on extremely flexible terms with no financial covenants," he said.

The notes are rated BBB+ and Baa2 by Standard and Poor's and Moody's Investors Services respectively.

"We are proud of the investment grade ratings we have received and we anticipate further strengthening of our credit position over time as our business continues to deliver strong results," said Mr Gillespie.

Special Note:

This release is not an offer of securities. The notes have not been, and will not be, registered under the U.S. Securities Act of 1933. The notes must not be offered or sold in the United States unless an exemption from the registration requirements of that Act applies.

For more information:
Stephen Woodhill
Cable & Wireless Optus
Phone: 02 9342 7850