Exhibit 99.1



      McLeodUSA Announces Extension of Forbearance Agreement with Lenders


CEDAR RAPIDS, Iowa--May 23, 2005--McLeodUSA Incorporated (Nasdaq:MCLD - News),
one of the nation's largest independent, competitive telecommunications
services providers, today announced that the Company and its Lenders have
agreed to the extension of the forbearance agreement initially entered into on
March 16, 2005. In light of the Company's continuing pursuit of strategic
alternatives and / or a financial restructuring the parties agreed to extend
the forbearance agreement through July 21, 2005. Under the terms of the
forbearance agreement, the Lenders continue to agree not to take any action as
a result of non-payment by the Company of certain principal and interest
payments due in March and June of 2005 and any related events of default
through July 21, 2005.

There can be no assurances that the Company will be able to reach an agreement
with its lenders regarding a capital restructuring or be able to identify a
strategic partner or buyer or reach agreement with any such strategic partner
or buyer on terms and conditions acceptable to the Company prior to the end of
the forbearance period.

While the Company continues to explore a variety of options with the view
toward maximizing value for all of its stakeholders, none of the options
presented to date have suggested that there will be any meaningful recovery for
the Company's current preferred stock or common stock holders. Accordingly, it
is unlikely that holders of the Company's preferred stock or common stock will
receive any recovery in a capital restructuring or other strategic transaction.

The Company believes that by not making principal and interest payment on the
credit facilities, cash on hand together with cash flows from operations are
sufficient to maintain operations in the ordinary course without disruption of
services. The Company does not expect that the exploration of the alternatives
described above will negatively impact its customers or vendors. The Company
remains committed to continuing to provide the highest level of service to its
customers and to maintaining its strong supplier relationships.

About McLeodUSA
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McLeodUSA provides integrated communications services, including local
services, in 25 Midwest, Southwest, Northwest and Rocky Mountain states. The
Company is a facilities-based telecommunications provider with, as of March 31,
2005, 38 ATM switches, 39 voice switches, 699 collocations, 432 DSLAMs and
approximately 2,300 employees. As of April 16, 2002, Forstmann Little & Co.
became a 58% shareholder in the Company. Visit the Company's Web site at
www.mcleodusa.com

Some of the statements in this press release include statements about our
future expectations. Statements that are not historical facts are
"forward-looking statements" for the purpose of the safe harbor provided by
Section 21E of the Exchange Act and Section 27A of the Securities Act. Such
statements may include projections of financial and operational results and
goals, including revenue, EBITDA, Adjusted EBITDA, profitability, savings and
cash. In some cases, you can identify these so-called "forward-looking
statements" by our use of words such as "may," "will," "should," "expect,"
"plan," "anticipate," "believe," "estimate," "predict," "project," "intend" or
"potential" or the negative of those words and other comparable words. These
forward-looking statements are subject to known as well as unknown risks and
uncertainties that may cause actual results to differ materially from our
expectations. Our expectations are based on various factors and assumptions and
reflect only our predictions. Factors that could cause actual results to differ
materially from the forward-looking statement include technological,
regulatory, public policy or other developments in our industry, availability
and adequacy of capital resources, our ability to implement a strategic
transaction or a capital restructuring, current and future economic conditions,
the existence of strategic alliances, our ability to generate cash, our ability
to implement process and network improvements, our ability to attract and
retain customers, our ability to migrate traffic to appropriate platforms and
changes in the competitive climate in which we operate. These and other risks
are described in more detail in our most recent Annual Report on Form 10-K
filed with the SEC. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of future events, new
information or otherwise.

Contact:
McLeodUSA Incorporated, Cedar Rapids, IA
Investor Contact: Bryce Nemitz
Press Contact:    Bruce Tiemann
Phone:  (319) 790-7800