NEW YORK (Bloomberg) ? Global Crossing Ltd.?s borrowing costs increased as it sold $405 million of high-risk, high-yield bonds in dollars and UK sterling partly to pay debt.

The Bermuda-based fibre-optic network operator, which emerged from bankruptcy a year ago, sold $200 million of ten-year notes priced to yield 6.8 percentage points more than US Treasuries of comparable maturity. In its previous debt sale in 2001, it sold $1 billion of notes priced to yield 3.6 percentage points more than Treasuries. The new bond pays a coupon of 10.75 percent compared with 8.7 percent on the previous security.

Global Crossing said on November 15 it would run out of cash by the end of December without the debt issue. Proceeds from the sale will be used to pay off $75 million of debt from a US unit and fund long-term cash needs, the company said in a statement on December 10. In October, the company said it would reduce its workforce by 600 people, or 15 percent, to help stem losses.

?The bonds do seem to require a leap of faith about what is happening at the company?, said Chris O?Hare, who manages about $1.4 billion of investment-grade and high-yield debt at Investec Asset Management in London and decided against buying any of the securities.

The company also sold $205 million of ten-year notes today, its first sale of debt in the UK currency. The securities, which pay a coupon of 11.75 percent, were priced to yield 7.54 percentage points more than equivalent UK government bonds.

Goldman Sachs Group Inc. managed the bond sales. The securities carry an option allowing the company to buy them back from investors after five years.

Global Crossing spokeswoman Becky Yeamans in Madison, New Jersey declined to comment further than the terms of the sale, when contacted by Bloomberg. The company is based in Hamilton, Bermuda, and run from Florham Park, New Jersey.

High-risk, or junk, bonds are rated below Baa3 by Moody?s Investors Service and below BBB- by Standard & Poor?s. The Global Crossing securities are rated B-, six levels below investment grade, by S&P, and one step lower, at Caa1, by Moody?s.

The average extra yield investors require to buy the debt of junk-rated companies fell to a record 296 basis points on December 17, according to Merrill Lynch?s Euro High Yield Constrained Index, which is seven years old. A basis point is 0.01 percentage point.

European companies have sold $26.5 billion of junk bonds so far this year, $10 billion more than the whole of last year and more than in any year since at least 1999, when Bloomberg data begins.

?This will be the last high-yield bond sale in the European market this year,? Renault said.

Global Crossing in October restated its 2003 results to increase underreported costs related to the use of other carriers? networks of $67 million. The errors were disclosed in April.

Government-controlled Singapore Technologies Telemedia Pte controls Global Crossing after it paid $250 million for a 62 percent stake to help the company exit bankruptcy.