CEDAR RAPIDS, Iowa –Oct. 19, 2005– McLeodUSA Incorporated:
– Customers, Employees and Trade Creditors will be Unaffected
– Bank Lending Group to Provide Additional Financing
– No Recovery for Preferred or Common Stockholders
McLeodUSA Incorporated, one of the nation’s largest independent, competitive telecommunications services providers, announced today that it has begun the solicitation process for approval from the Company’s lenders for a restructuring of its approximately $777.3 million in bank debt plus accrued interest. If the required approvals are received, the restructuring will be accomplished through a prepackaged plan of reorganization for the Company and its subsidiaries pursuant to a Chapter 11 bankruptcy filing. The Company expects to continue to pay its employees and trade creditors in the normal course of business without disruption. Customers will be unaffected by the restructuring, and the Company will maintain its commitment to the highest levels of customer service and quality.