Savvis Finds $625M to Refi With

July 12th, 2010 by · Leave a Comment

On Friday, colocation and cloud provider Savvis (news, filings) [a subsidiary of CenturyLink (NYSE:CTL, news, filings)] announced its intention to raise $625M, of which $550M would be via a term loan due 2016 with the remaining $75M coming in the form of a revolving credit facility due 2014.  They will use the money in part to pay for the bonds repurchased by their tender offer earlier this month for the $345M of 3% convertible notes outstanding that come due in May of 2012.  Those 3% converts were trading at about 94 cents on the dollar prior to the tender offer for 99 cents, while the conversion price of $70.38 seems rather unlikely to happen given current $15 levels.  So likely most of those bonds will be tendered.  

They will also use the proceeds to pay off their existing credit facility as well as other bank and vendor financing, which together amounted to about $65M as of the end of the first quarter.  That means that Savvis will have some cash left over from this deal, even if all the bonds are tendered they should add some $140M in cash plus the $75M revolver to their balance sheet.

That will give them some additional firepower to continue expanding their datacenter footprint and continue their cloud initiatives.  Savvis had projected some $50-55M for datacenter expansion this year, but perhaps there are some new plans in the wings?

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Categories: Cloud Computing · Datacenter · Financials

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