Allegiance borrows $350 million
Allegiance Telecom tapped a line of credit for $350 million today in an attempt to lock in attractive interest rates and fund its business plan.
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The CLEC said it would secure an interest rate of 6.28% on the loan, which is made up of a $150 million delayed draw term loan and a $200 million revolving loan. Both are due on December 31, 2006.
“We believe by drawing funds now … we can take full advantage of the significant interest rate cuts implemented by the Federal Reserve this year,” said a statement by Thomas M. Lord, Allegiance’s chief financial officer.
Allegiance has $150 million left on the credit facility, which it plans to draw on “only if opportunities arise beyond [its] current business plan.”
At the end of the second quarter, Allegiance had $312 million in cash and cash equivalents on hand. It expects to turn EBITDA positive during 2002.
--Vincent Ryan, Business Editor
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© 2012 Penton Media Inc.
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