EarthLink plans $55 million revolver draw to fund notes redemption

By Susanna Moon

Chicago, May 14 – EarthLink Holdings Corp. said it plans to draw down about $55 million under its senior secured revolving credit facility to finance the redemption of $70 million of its 8 7/8% senior notes due 2019.

Interest on the drawdown will be Libor plus 350 basis points, which is lower than the interest rate for the notes, according to a company press release.

At current Libor rates, EarthLink said its annualized debt service costs will be $6 million lower than they were at the beginning of 2015.

The drawdown will leave about $80 million of liquidity under the $135 million credit facility.

The notes will be redeemed at 104.438 plus accrued interest to but excluding the redemption date of June 15.

EarthLink said it also plans to fund the redemption using about $20 million of cash.

EarthLink is an Atlanta-based IT services and communications provider.

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