system from Bermuda-based FLAG Telecom Holdings Ltd in a bid to boost Saudi Arabia's country's global connectivity.

The news came in Sunday's edition of the Saudi Gazette. The underwater cabling capability will be used to carry advanced communications services, including high speed data, broadcast and Internet traffic.

STC said a consortium of companies outside Saudi Arabia and the Saudi private sector will help pay for the cable system which will stretch from the Red Sea port city of Jeddah to the UK and US.

FLAG, or Fibreoptic Link Around the Globe, was formed as a holding company in 1999. Its network includes the FLAG Europe-Asia cable system, the world's longest privately-owned digital fibre optic undersea cable system.

A proposed offering of $600 million senior dollar and euro notes by Bermuda-based FLAG Telecom Holdings was assigned a B (Single-B-Plus) rating by Duff & Phelps Credit Rating Co. (DCR) recently.

The notes, which are due 2010, will be issued under Rule 144A of the Securities Act and are non-callable for five years.

Proceeds from the senior notes, when combined with $637 million in proceeds from an initial public offering in February of this year, will be used to fund expansions of the FLAG Telecom network, including new cable systems; to fund new product and service offerings; and for working capital purposes.