Nortel Completes Offering of $675 Million Senior Notes

On May 28, 2008, Nortel Networks Limited (“NNL”), the principal direct operating subsidiary of Nortel Networks Corporation (“NNC”), completed an offering of US$675 million aggregate principal amount of 10.750 per cent senior unsecured notes due 2016 (the “Notes”), fully and unconditionally guaranteed by NNC and initially guaranteed by another NNC subsidiary, Nortel Networks Inc. (“NNI”). The offering was made in the United States to qualified institutional buyers pursuant to Rule 144A under the US Securities Act of 1933, as amended (the “Securities Act”), to persons outside of the United States under Regulation S under the Securities Act, and to accredited investors in Canada pursuant to applicable private placement exemptions.

Nortel will use the net proceeds of the Offering, together with available cash, to redeem at par the US$675 million outstanding principal amount of NNC's convertible senior notes due September 1, 2008.

Nortel was represented in house by Gordon A. Davies, Anna Ventresca and Charles Helm. Cleary Gottlieb Steen & Hamilton LLP represented Nortel in the United States with a team comprised of Craig Brod, Wanda Olson, Sandra Flow, Carsten Fiege, Laura Forman, Jason Ford and Jung Ju (securities and financing) and Bill McRae and David Danon (tax). In Canada, Nortel was represented by Ogilvy Renault LLP with a team comprised of Michael Lang, Paul Fitzgerald and Heidi Reinhart (Securities), Andrew Welsh and Nicole Sigouin (banking) and Barry Segal (tax), and Christine Dubé (securities).

The syndicate of initial purchasers of the Notes, led by J.P. Morgan Securities Inc. and Citigroup Global Markets Inc., was represented in the United States by Cahill Gordon & Reindel LLP with a team comprised of Dan Zubkoff, Corey Wright, Michael Kazakevich, Paula Azulay and Heidi Spalholz (corporate, banking and securities) and Kevin Burke and in Canada by Blake, Cassels & Graydon LLP with a team comprised of Frank Arnone and Ali Naushahi (securities), Michael Burke (banking) and Leslie Morgan and Jeffrey Trossman (tax).



Cleary, Gottlieb, Steen & Hamilton Norton Rose Fulbright Canada LLP Cahill Gordon & Reindel LLP Blake, Cassels & Graydon LLP