Rhythms and Blues: Cisco Funds Cash-Strapped DSL Outfit as Investors Flee

Investors may think Rhythms NetConnections (RTHM Quote) is on its last legs, but Cisco (CSCO Quote) is handing the troubled telco a crutch.

Related Stories

Optical Spending Slowdown Pounds Networking Stocks

Nortel Spots the Tip of the Optical-Slowdown Iceberg

Networking Stocks Slide as Researcher Adds to Slowdown Talk

Stocks Struggle to Overcome Equipment-Spending Slowdown

With Rhythms' shares trading around $1.50, its high-yield bonds fetching between 43 and 73 cents on the dollar and its preferred-stock dividends having been deferred Tuesday, some people might not see sunshine in the broadband service provider's future.

Enter Cisco. Having lent $75 million to Rhythms, the Englewood, Colo.-based wholesale provider of digital subscriber lines, Cisco has offered to lend the struggling DSL firm an additional $50 million, to help Rhythms continue with its buildout plans. ...