Joining the 2010 expansion parade, XO Holdings (news, filings) has made a move of its own. The company announced today an 800 mile expansion of its fiber backbone into southern Texas, adding a loop through Corpus Christie, McAllen, Harlingen, Laredo, and Victoria. The company is also adding a new international gateway at the Mexican border in McAllen, which along with its other gateways to Latin America in San Diego, Los Angeles, and Miami, will improve the company's connectivity to the region.
This is not the first sign of life from XO this year, just a little over a week ago they partnered with Hibernia to increase their transatlantic connectivity. One wonders what else they might have up their sleeve, after all there are still a few gaps in their national coverage and we still hear little publicly about how they are leveraging all that valuable metro fiber. But they still don't talk much to anyone beyond the occasional press release and mandatory SEC filing.
XO's expansion comes at a time when they are still seeking to refinance their class A preferred stock which comes due in a few months. Obviously they aren't terribly worried about it, perhaps we will hear soon on the subject? With the credit markets open they ought to be able to raise straight debt to do it, but they have in the past said that they won't do so due to the financial covenants they would need to agree to. On the other hand, given the legal tussle still going on with minority shareholder R2 Investments, Icahn might not want to do this refi on his own due to the scrutiny. Straight debt is the easiest path here, but with Icahn you never know.
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