1/5/01

XO Announces $450 Million Convertible Debt Offering

RESTON, VA - XO Communications Inc. (NASDAQ:XOXO) announced that it has entered into an agreement providing for the issuance of $450 million of 5.75% convertible subordinated notes due 2009 in a private placement under SEC Rule 144A. XO has also granted the initial purchasers a right to purchase up to $67.5 million of additional convertible subordinated notes. The notes are convertible at the option of the holders, prior to redemption or maturity, into XO common stock at a conversion price of $25.5438 per share (subject to adjustment upon the occurrence of certain events). The transaction is expected to close on January 11, 2001.

XO will use the net proceeds it expects to receive to finance the expansion of existing networks and services, develop and acquire additional networks and services, and fund operating losses and working capital.

Neither the convertible subordinated notes, nor XO’s common stock issuable upon conversion thereof, have been registered under the Securities Act of 1933, as amended, and neither may be offered or sold in the United States absent an effective registration statement or an applicable exemption from the registration requirements of such act. This press release does not constitute an offer to sell or the solicitation of an offer to buy the convertible subordinated notes or underlying shares of XO’s common stock issuable upon conversion of such convertible subordinated notes.

About XO Communications
XO Communications is one of the world’s leading providers of broadband communications services offering local and long distance voice communication services, Digital Subscriber Line (DSL) access, Web hosting and e-commerce service, Virtual Private Networks (VPNs), dedicated access, global transit and application infrastructure services for delivering applications over the Internet or a VPN.

XO has assembled an unrivaled set of facilities-based broadband networks and Tier One Internet peering relationships that, when complete, will serve much of the United States, Canada and Europe. In the United States, XO has more than 570,000 metro and inter-city fiber miles in operation. The Company is also North America’s largest holder of fixed broadband wireless spectrum, with licenses covering 95 percent of the population of the 30 largest U.S. cities and a partnership with licenses covering all of the top cities in Canada. XO has also acquired metro fiber networks and conduits being constructed in Europe that, when complete, will serve the London, Berlin, Dusseldorf, Frankfurt, Hamburg, Munich, Brussels, Amsterdam and Paris markets and an 88,000 fiber-mile pan-European fiber network connecting 21 major European cities and transatlantic capacity that will eventually expand to 10 Gbps.

For more information contact:

Todd Wolfenbarger / XO™ Communications
Media and Industry Analysts
703-547-2011 or 703-675-3496

Lisa Miles / XO™ Communications
Financial Analysts
703-547-2440