Smart Modular Technologies buys $26.2 million in 5.8% senior floaters

By Devika Patel

Knoxville, Tenn., Oct. 26 - Smart Modular Technologies (WWH), Inc. said it repurchased $26.2 million of its 5.8% senior secured floating-rate notes due 2012 at 95.5.

The company used $25 million in cash on hand to finance the repurchase. There is now $55.1 million of the notes remaining outstanding, down from $81.3 million.

By using cash on hand to extinguish almost one-third of its long-term debt, Smart expects to save $1.5 million in annual interest expense.

"We took advantage of an opportunity to repurchase a portion of our long-term debt at a discount. The repurchase utilized our excess cash to retire debt early and is accretive to income, while reducing leverage," senior vice president and chief financial officer Barry Zwarenstein said in a press release. "On a long-term basis, we expect to generate positive cash flow from operations, which will further strengthen our balance sheet and enhance our financial flexibility."

Based in Fremont, Calif., Smart Modular distributes, manufactures and supplies memory technology.

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