RealTime IT News

NorthPoint Communications Snags $250 Million in Financing

Major broadband service provider NorthPoint Communications Inc. Thursday closed on $250 million of secured credit facilities.

The sole lead arranger and syndication agent for the credit facilities, which consists of $250 million in committed financing and $50 million in the form of a pre-approved incremental facility, is Goldman Sachs Credit Partners L.P. (GS).

NorthPoint (NPNT), which specializes in providing high-speed Internet access over existing phone lines using digital subscriber line (DSL) technology, recently announced its plans to expand its network to 60 major U.S. markets -- or approximately half of all U.S. homes and businesses -- by the end of next year.

"These facilities further strengthen NorthPoint's balance sheet and position us for continued growth," said Henry Huff, NorthPoint's chief financial officer. "This additional financing builds on our strong base of over $530 million of funded equity and will enable NorthPoint to continue to execute on its plan to establish the nation's most expansive broadband network."

In April, Microsoft MSFT invested $30 million in NorthPoint Communications in a deal in which the software giant also agreed to buy 100,000 DSLs.

NorthPoint Communications, which targets small- and mid-sized businesses, operates DSL-based local networks in 33 major markets, spanning 60 metropolitan statistical areas (MSAs), and expects to reach over 60 markets and 110 MSAs by the end of 2000.

One of NorthPoint's toughest competitors is Covad Communications Inc. (COVD), which targets consumer markets across the country through partnerships with a number of regional ISPs, including giant MindSpring Enterprises (MSPG).