found a pocket of investor appetite for initial public offerings and junk bonds when it completed its long-awaited IPO on Wednesday and junk bond sale on Thursday.

Still, poor market conditions forced Vancouver-based 360networks, run by former Microsoft Corp. chief financial officer Gregory Maffei, to scale back its IPO by about 22 percent to $648 million, and the bond sale by 20 percent to just under $800 million.

In March, the company announced plans to buy Globenet Communications Ltd., the parent company of Bermuda long distance telephone provider TeleBermuda International.

The combined $1.44 billion gross fell well short of the originally expected maximum of $1.828 billion.

The IPO followed the withdrawal or postponement of many planned IPOs in the wake of last week's gut-checking 25 percent decline in the Nasdaq, and the bond sale came despite persistent nasty conditions in the junk bond market.

"Anything having to do with fibre or infrastructure is the kind of deal that grabs Wall Street's attention in the current chilly market environment,'' said Corey Ostman, chief technology officer at Los Angeles-based http:/www.alert-ipo.com.

"It's obvious that investors are being hyperselective on new deals, and 360 is by far the strongest deal of the week.'' Formerly known as Worldwide Fiber Inc., 360networks sold 46.275 million subordinated shares, up from 46 million, at $14 a share.

That was at the high end of the $12 to $14 per share range expected, but below the $16 to $18 earlier expected.

The pricing puts the value of 360networks at $11.4 billion.

The company also sold $600 million plus 200 million euros ($188 million) of 13.00 percent eight-year senior notes at a discount to yield 13.50 percent, matching expectations.

Its dollar-denominated notes yielded 730 basis points (7.30 percentage points) more than US Treasuries, while the euro-denominated notes yielded 821 basis points (8.21 percentage points) more than the OAT (French government bond).

The company, which has $675 million of other outstanding debt, initially cut the bond sale's size to $700 million from $1.0 billion, but then added $100 million. Moody's Investors Service rates the notes B3, its sixth highest junk grade.

Standard & Poor's rates them B-plus, its fourth highest.

The yields are much higher than what competitors selling debt have recently had to offer investors. For example, Broomfield, Colo.-based Level 3 Communications Inc., which is building its own high-speed fiber-optic networks in the United States and Europe, offered an 11 percent yield when it sold B3/B rated eight-year notes just eight weeks ago.

It's no secret why 360networks scaled back its IPO and paid up on the bonds.

The IPO market has turned ice cold following a stunning run that began in late 1998.

The days of companies pricing new shares richly, and often then seeing them double or triple in value on the first day, are on hold.

"Most IPOs are going to be greeted with a fairly chilly reception, but a company like 360, if it had come last November, it would have broken records,'' said Ostman.

Junk bonds, meanwhile, have recently seemed comatose. Their total return in 2000 is negative 1.469 percent, Merrill Lynch & Co. said. Investors have drained nearly $3.2 billion from the sector this year.

And through Wednesday companies sold just $16.97 billion of junk debt, down 48 percent from the same period in 1999, Thomson Financial Securities Data said.

Also known as high-yield bonds, junk bonds offer investors high yields to compensate them for increased risk.

360networks has a fiber-optic network that rings Canada and the United States and is building a trans-Atlantic, undersea fiber-optic network extending to Liverpool, England, and Dublin, Ireland, from Halifax, Nova Scotia, and Boston, Massachusetts.

It said its network now covers 17,100 miles, and it expects the network to cover 56,300 miles by the end of 2001.

A private construction firm, Ledcor Industries Ltd., spun off 360networks two years ago and still holds about 90 percent of its voting shares.

The company's shares will trade on Nasdaq under the symbol TSIX and the Toronto Stock Exchange under the symbol TSX.

Donaldson, Lufkin & Jenrette Securities Corp. and Goldman Sachs & Co.

comanaged the IPO.

DLJ managed the bond sale, which was conducted in the United States as a private placement.