Crossing Holdings Ltd's offering of $1.1 billion of senior notes due 2009 and $900 million of senior notes due 2006.

The proceeds from these offerings will be used to refinance existing debts.

DCR placed the ratings of Global Crossing on Rating Watch-Down on October 15, 1999 following its announcement to acquire RACAL for $1.65 billion in cash.

The company was placed on rating watch pending information concerning the pro forma finance and corporate structure for the RACAL acquisition.

Global Crossing recently financed its $500 million cash commitment for its RACAL acquisition through the issuance of $1 billion of convertible preferred stock, which will receive equity treatment in credit analysis.

The company has stated that the remaining acquisition price of RACAL will be funded in a manner non-recourse to Global Crossing.

There is some credit concern that a material degree of implicit support will exist in this funding considering that Global Crossing has a 100 percent ownership position.

DCR's ratings of Global Crossing reflect the company's increasing revenue and cash flow diversity from normal, but highly variable sub-sea transport to a balance of high-growth sub-sea and data revenues, but also very stable local telephony revenues.

Global Crossing's transport business should experience good growth due to the demand for international calling, increasing worldwide teledensity and capacity shortages on sub-sea cables.

Frontier's telephone, Internet web hosting and wholesale data revenues continue to experience solid growth.

The company's wholesale voice business has experienced competitive pressure.

The company continues to acquire assets or enter joint venture relationships, such as RACAL and Hutchison Global Crossing, respectively, to gain important control of global direct end-user access.

DCR is a leading global rating agency with 33 local market offices providing ratings and research on debt issues and insurance claims paying ability in more than 50 countries.