Rule No 424(b)(3)
Registration Statement No 333-35910
PROSPECTUS SUPPLEMENT NO.3 DATED October 27, 2000
(To Prospectus dated August 3, 2000)
[LOGO OMITTED]
16,500,000 shares of 7% Series D Cumulative Convertible Preferred Stock
15,430,800 shares of Common Stock issuable on conversion
5,000,000 shares of Common Stock issuable as dividends
750,000 shares of Common Stock issuable in exchange
for funds held in a deposit account
-------------------------------------
This supplement amends and supplements certain information contained
in the prospectus, dated August 3, 2000. This supplement is not complete
without, and may not be delivered or utilized except in connection with,
the prospectus, including any amendments or supplements to the prospectus.
The information contained in this supplement supersedes any contrary
statements contained in the prospectus.
This supplement relates to the sale from time to time by the selling
shareholders of up to 16,500,000 shares of our Series D preferred stock
and up to 15,430,800 shares of our common stock issuable upon conversion
of the Series D preferred stock. In addition, we may issue to the
selling shareholders up to 5,000,000 shares of common stock as dividends
on the Series D preferred stock and up to 750,000 shares of common stock
in lieu of cash payments otherwise required under the deposit account
arrangement described in the prospectus.
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The date of this supplement is October 27, 2000
<PAGE>
SELLING SHAREHOLDERS
In February 2000 we issued an aggregate of 16,500,000 shares of our Series
D preferred stock in an offering made pursuant to Rule 144A under the Securities
Act of 1993. The Series D preferred stock is convertible into shares of our
common stock.
None of the selling shareholders has held any position or office or had a
material relationship with PSINet or any of its affiliates within the past three
years, except for Donaldson, Lufkin & Jenrette Securities Corporation, which,
from time to time, has served as our investment banker and an underwriter and
initial purchaser of our securities and Merrill Lynch, Pierce Fenner and Smith
Inc. which, from time to time, has served as an underwriter and initial
purchaser of our securities.
The following table sets forth information as of October 26, 2000, which
has been provided to us by the selling shareholders, regarding beneficial
ownership of our Series D preferred stock and common stock by each selling
shareholder.
<TABLE>
<CAPTION>
Shares That
Shares May Be Sold
Beneficially Pursuant to This Shares Owned
Owned(1) Prospectus After Offering
-------------------------- ------------------------ -------------------------------
Series D Series D Series D
Preferred Common Preferred Common Preferred Common
Stock Stock(2) Stock Stock Stock Stock(3)
------------- ----------- ------------ ---------- --------------- --------------
No. of No. of No. of No. of No. of No. of
Selling Shareholders Shares Shares Shares Shares Shares % Shares %
-------------------- ------ ------ ------ ------ ------ ------- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alscott Investments, LLC.... 56,006 52,377 56,006 52,377 -- -- -- --
Alta Partners Holdings, LDC. 150,000 140,280 150,000 140,280 -- -- -- --
Argent Classic Bermuda...... 240,000 224,448 240,000 224,448 -- -- -- --
Argent Convertible Arbitrage
Fund (A Fund)............... 110,000 102,872 110,000 102,872 -- -- -- --
Aspen Equity Income Portfolio 2,201 2,059 2,201 2,059 -- -- -- --
Aspen Global Technology Fund 32,620 30,507 32,620 30,507 -- -- -- --
Aspen Growth & Income
Fund ..................... 31,446 29,409 31,446 29,409 -- -- -- --
Bank America Pension Plan... 75,000 70,140 75,000 70,140 -- -- -- --
California Public Employees'
Retirement System........... 165,000 154,308 165,000 154,308 -- -- -- --
CFFX,LLC.................... 92,600 86,600 92,600 86,600 -- -- -- --
Circlet (IMA) Limited....... 66,700 62,378 66,700 62,378 -- -- -- --
Credit Suisse First Boston
Corporation................. 175,000 163,660 175,000 163,660 -- -- -- --
Deeprock & Co............... 75,000 70,140 75,000 70,140 -- -- -- --
Deutsche Bank Securities Inc 908,000 849,162 908,000 849,162 -- -- -- --
Donaldson, Lufkin & Jenrette
Securities Corp............. 444,000 415,229 444,000 415,229 -- -- -- --
ECT Investments, Inc........ 150,000 140,280 150,000 140,280 -- -- -- --
Family Service Life
Insurance Co................ 12,000 11,223 12,000 11,223 -- -- -- --
Federated Insurance Series,
on behalf of its Federated
Utility Fund II............. 54,000 50,501 54,000 50,501 -- -- -- --
Federated Utility Fund, Inc. 347,000 324,515 347,000 324,515 -- -- -- --
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Fidelity Financial Trust:
Fidelity Convertible
Securities Fund............ 214,800 200,881 214,800 200,881 -- -- -- --
Fundamental Investors, Inc.. 575,000 537,740 575,000 537,740 -- -- -- --
General Motors Welfare
Benefit Trust (L-T Veba).... 77,500 72,478 77,500 72,478 -- -- -- --
General Motors Welfare
Benefit Trust (S-T Veba).... 50,000 46,760 50,000 46,760 -- -- -- --
GLG Market Neutral Fund..... 413,800 386,986 413,800 386,986 -- -- -- --
Goldman Sachs and Company... 35,990 33,658 35,990 33,658 -- -- -- --
Granville Capital Corporation. 128,000 119,706 128,000 119,706 -- -- -- --
Guardian Life Insurance Co.. 180,000 168,336 180,000 168,336 -- -- -- --
Guardian Pension Trust...... 8,000 7,482 8,000 7,482 -- -- -- --
JADV Equity Income Fund..... 179 168 179 168 -- -- -- --
JADV Growth & Income Fund... 4,046 3,784 4,046 3,784 -- -- -- --
Janus Equity & Income Fund.. 137,940 129,002 137,940 129,002 -- -- -- --
Janus Global Technology
(Nomura).................... 167,380 156,534 167,380 156,534 -- -- -- --
Janus Global Technology Fund 1,360,000 1,271,872 1,360,000 1,271,872 -- -- -- --
Janus Growth & Income Fund.. 1,313,953 1,228,809 1,313,953 1,228,809 -- -- -- --
JMG Capital Partners, LP.... 509,850 476,812 509,850 476,812 -- -- -- --
JMG Triton Offshore Fund
Ltd......................... 1,019,350 953,297 1,019,350 953,297 -- -- -- --
JNL/Janus Growth & Income Fund 2,975 2,783 2,975 2,783 -- -- -- --
JP Morgan Securities, Inc... 282,600 264,288 282,600 264,288 -- -- -- --
KBC Financial Products
USA Inc..................... 160,000 149,632 160,000 149,632 -- -- -- --
KVS Growth and Income Fund.. 10,535 9,853 10,535 9,853 -- -- -- --
L.A. Fire and Police Pension
Fund........................ 429,000 401,201 429,000 401,201 -- -- -- --
LLT, Ltd.................... 12,000 11,223 12,000 11,223 -- -- -- --
Lyxor Master Fund........... 73,300 68,550 73,300 68,550 -- -- -- --
MassMutual Corporate
Investors................... 15,000 14,028 15,000 14,028 -- -- -- --
MassMutual Corporate Value
Partners Limited............ 40,000 37,408 40,000 37,408 -- -- -- --
MassMutual High Yield
Partners II LLC............. 65,000 60,788 65,000 60,788 -- -- -- --
Massachusetts Mutual Life
Insurance Company........... 65,000 60,788 65,000 60,788 -- -- -- --
McMahan Securities Co.L.P. 65,000 60,788 65,000 60,788 -- -- -- --
S-2
<PAGE>
Merrill Lynch, Pierce, Fenner
& Smith Inc................. 35,000 53,716 35,000 32,732 -- -- 20,984 --
Morgan Stanley Dean Witter
Convertible Securities Trust 65,000 60,788 65,000 60,788 -- -- -- --
New York Life Insurance
Company..................... 400,000 374,080 400,000 374,080 -- -- -- --
New York Life Insurance and
Annuity Corporation......... 55,000 51,436 55,000 51,436 -- -- -- --
Peoples Benefit
Insurance Company........... 144,700 135,324 144,700 135,324 -- -- -- --
Peoples Benefit Life
Insurance Company (Teamsters
Separate Account)........... 113,000 105,678 113,000 105,678 -- -- -- --
PHX-Janus Equity/Income
Series...................... 1,220 1,141 1,220 1,141 -- -- -- --
Pilgrim Convertible Fund.... 31,487 29,447 31,487 29,447 -- -- -- --
Pine Grove Enhanced Partners
V LLC....................... 27,600 25,812 27,600 25,812 -- -- -- --
Pitney Bowes Retirement
Fund........................ 130,922 122,439 130,922 122,439 -- -- -- --
Q Opportunity Fund, LTD..... 697,100 651,928 697,100 651,928 -- -- -- --
Ramius Capital Group
Holdings, Ltd............... 5,000 4,676 5,000 4,676 -- -- -- --
Retail Clerks Pension
Trust #2.................... 48,200 45,077 48,200 45,077 -- -- -- --
Robertson Stephens Inc...... 35,000 32,732 35,000 32,732 -- -- -- --
Salomon Smith Barney Inc.... 326,900 305,717 326,900 305,717 -- -- -- --
Southport Management Partners
L.P......................... 20,000 18,704 20,000 18,704 -- -- -- --
St. Albans Management
Partners L.P................ 122,000 114,095 122,000 114,095 -- -- -- --
STI Capital Management...... 44,700 41,804 44,700 41,804 -- -- -- --
SunAmerica Series Trust, on
behalf of its Federated
Utility Portfolio........... 33,800 31,610 33,800 31,610 -- -- -- --
Susquehanna Capital Group... 74,700 69,860 74,700 69,860 -- -- -- --
The Income Fund of America,
Inc......................... 650,000 607,880 650,000 607,880 -- -- -- --
Yield Strategies Fund I, LP. 20,000 18,704 20,000 18,704 -- -- -- --
Yield Strategies Fund II, LP 90,000 84,168 90,000 84,168 -- -- -- --
Zurich HFR Master Hedge Fund
Index Ltd................... 8,000 7,482 8,000 7,482 -- -- -- --
------- ------ ------ ------ ----- ------
Total.............. 13,782,100 12,910,014 13,782,100 12,889,030 0 20,984
</TABLE>
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<PAGE>
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(1) Includes any shares as to which the individual has sole or shared
voting power or investment power and also any shares which the
individual has the right to acquire within 60 days of the date of this
prospectus. Unless otherwise indicated in the footnotes, each person has
sole voting and investment power with respect to the shares shown as
beneficially owned.
(2) Includes shares of common stock issuable upon conversion of our
Series D preferred stock. The Series D preferred stock is convertible
into common stock at the conversion rate of .9352 shares of common stock
for each share of Series D preferred stock. Does not include common
stock that we may issue to the selling shareholders as dividends on our
Series D preferred stock or in exchange for funds held in the deposit
account. See "Summary - Description of Series D Preferred Stock."
(3) Based upon an aggregate of 190,064,576 shares of PSINet common stock
outstanding as of June 30, 2000 and assuming the sale of all shares of
Series D preferred stock offered hereby.
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