EXHIBIT 10.39

PRIVATE  & CONFIDENTIAL
-----------------------

26th October, 2000

Viatel UK Limited
Parnell House
25 Wilton Road
London
SW1V 1LW
Attn: Mr S. Grist

                                FACILITY LETTER


Dear Mr  Grist

Cisco  Systems  Capital  (CSC)  specializes  in  providing   innovative  finance
solutions for Cisco Systems products and services.  We are pleased to detail our
terms and  conditions  under  which we are  prepared to  consider  offering  the
following lease facilities.




1. LESSOR:              Cisco Systems Capital (the "Lessor")

2. LESSEE:              Viatel UK Limited ( the "Lessee")

3. GUARANTOR            Viatel Inc

4. FACILITY AMOUNT:     Lease  Facility  providing  for  leases  in  US  Dollars
                        subject to a US$50,000,000 aggregate credit limit.

5. AVAILABILITY:        The facility will be made  available to the Lessee up to
                        and including [Redacted] subject always to the terms and
                        conditions   contained  herein.   Such  facility,   once
                        granted,  will remain in place until such date, provided
                        there  is in  the  Lessor's  sole  opinion  no  material
                        adverse change in the Lessee's or Guarantor's  financial
                        condition.

<PAGE>


6. LEASE TERM/PAYMENT   The  term of  each  lease  shall  be  [Redacted]  years,
   REQUIREMENTS:        repayable by [Redacted]  quarterly payments as set forth
                        below.  All payments will be made by Standing Order. All
                        payments are shown exclusive of VAT. The Lessor reserves
                        the right to amend the  payments in line with  movements
                        in the three-year  swap rate as determined by the Lessor
                        based upon Bloomberg on the day the Lessor  prepares any
                        Equipment Lease Schedule ("Swap Rate").

7. RENTAL PAYMENT       [Redacted]   payable   quarterly  in  advance   INVOICED
   [Redacted]           (exclusive  of VAT) based on an assumed Swap Rate of 7%.
                        If the actual Swap Rate is different to the assumed Swap
                        Rate on  draw-down  then the  payment  will be  adjusted
                        either  upwards or  downwards by the  Adjustment  Factor
                        shown below and pro-rata amounts thereof.

8. ADJUSTMENT FACTOR    [Redacted] for  every [Redacted]  per cent ([Redacted]%)
                        movement in  the  assumed  Swap Rate  of 7% and pro-rata
                        amounts thereof.

9. EXTENSION RENTAL     [Redacted] % of  invoiced  amount  payable  annually  in
   PAYMENTS             advance (exclusive of VAT)

10. REBATE OF RENTALS   [Redacted]% of net sale proceeds.

11. PURPOSE:            For  the   purchase  of  Cisco  Networking   hardware  &
                        Software products and services  (including  limited soft
                        costs)  up  to  an  aggregate  cost  not  to exceed  the
                        Facility  Amount.   For  the  avoidance  of  doubt,  any
                        Cisco  Services to be  financed  under the facility will
                        be limited to one-year Service agreement only.

12. CONDITIONS TO        To include without limitation :
   FINANCING COMMITMENT: 1. Guarantee of Viatel Inc.

                         2. Soft costs not to exceed 10% of  total facility.

                         3. Equipment   to  be  located   in   UK,   with  other
                            jurisdictions   subject   to   prior   consent.   In
                            particular,  [Redacted]  will  be  consented to with
                            certain  conditions  attached   in   the   case   of
                            [Redacted]. CSC will  exercise reasonable  endeavors
                            to  undertake and complete  country due diligence as
                            to [Redacted] and [Redacted] on or  before  November
                            30, in  order to determine  whether  consent  can be
                            granted   to   the  location of  equipment  in  such
                            countries, and if so, under what conditions.

                         4. [Redacted]

<PAGE>

13. MISCELLANEOUS:      Whether or not the  transaction(s)  contemplated  hereby
                        are consummated,  the Lessee agrees to pay on demand all
                        reasonable  costs and  expenses of the Lessor,  fees and
                        disbursements  of  counsel  to the  Lessor  incurred  in
                        connection  with this  facility and the matters  related
                        thereto with the negotiation,  documentation and closing
                        of the transactions contemplated (not to exceed 0.25% of
                        the total Facility  Amount).  THE LESSOR MAY IN ITS SOLE
                        DISCRETION,  WITHDRAW THIS FACILITY OFFER, IF THE LESSEE
                        HAS NOT COMPLIED TO THE LESSOR'S  SATISFACTION  WITH THE
                        TERMS AND CONDITIONS OF THIS DOCUMENT IN ITS TOTALITY BY
                        30TH OCTOBER  2000.  THIS  FACILITY  LETTER  CANCELS AND
                        REPLACES ANY PREVIOUS FACILITY LETTERS SENT BY LESSOR TO
                        LESSEE.


This  letter  and its terms are  confidential  and may not be  disclosed  to any
person  or  entity  other  than on a  confidential  basis  to your  accountants,
attorneys and other  professional  advisors  retained by you in connection  with
this Facility, and shall be governed by English law. Further, Viatel Inc and its
related companies, defined in this document as any company where Viatel Inc, has
a direct or indirect  holding of more than 5%, agrees that it shall not, without
Lessor's prior written consent, disclose the existence or terms of any financing
facility  with Lessor or use the name or logo of the Lessor or Cisco  Systems in
any press release,  advertisement or other public pronouncement nor represent to
any  person  that the  relationship  between  the Lessee and the Lessor or Cisco
Systems is other than that of seller of equipment and/or  lessor/lessee,  except
as may be required by law.  Save for the content of  paragraph  13 above,  which
shall be binding between the parties,  this letter is `subject to lease ` and is
not intended to create any legal relationship  between yourselves and ourselves.
No such  relationship  shall exist until both parties have executed a definitive
lease agreement.

Yours sincerely,                                 Yours sincerely,
CISCO SYSTEMS CAPITAL                            ACCEPTED BY:



                                                 for: VIATEL UK LIMITED


By: /s/ SIGNATURE ILLEGIBLE                      NAME: /s/ Allan Shaw
                                                       -------------------------

Date:                                            Date:



CC A. Shaw, Chief Financial Officer, Viatel Inc
      W. Murphy, President, Viatel Inc