DALLAS, TEXAS, January 3, 2000 -- Allegiance Telecom, Inc. (Nasdaq:ALGX), a competitive local exchange carrier (CLEC), today announced that Goldman Sachs Credit Partners L.P., Toronto Dominion (Texas), Inc., BankBoston, N.A., Morgan Stanley Senior Funding, Inc. and various other lenders, have provided the Company with a commitment to fully underwrite $500 million of senior secured credit facilities. The credit facilities consist of a $350 million revolving credit facility and a $150 million delayed draw term loan facility. The credit facilities are subject to customary conditions for a transaction of this type, including completion of definitive documentation and finalization of all terms and conditions. The Company expects to close these facilities in February 2000.

About Allegiance Telecom, Inc.
Based in Dallas, Texas, Allegiance Telecom is a facilities-based competitive local exchange carrier that offers businesses a complete package of telecommunications services, including local, long distance, international calling, high-speed data transmission and Internet services. Allegiance is currently operational in the following 19 markets: Atlanta, Baltimore, Boston, Chicago, Dallas, Detroit, Fort Worth, Houston, Long Island, Los Angeles, New York, Northern New Jersey, Oakland, Orange County, Philadelphia, San Diego, San Francisco, San Jose and Washington, D.C. The Company's web address is: www.allegiancetele.com. Allegiance's common stock is traded on the Nasdaq National Market under the symbol ALGX.