Terremark Worldwide (TMRK) has arranged $250 million in loans to restructure its debt and fund its data center building program, the company said this morning. Credit Suisse Securities will supply a $150 million term loan and Tennenbaum Capital Partner has committed to a $100 million term loan, which will be used to pay off Terremark’s existing debt at lower borrowing costs.
Credit Suisse will have the first lien position and Tennenbaum the second line on the loans, which will be secured by “substantially all of the company’s assets.” An additional financing announcement from Terremark has been expected since the company announced its purchase of Data Return for $85 million last month. Credit Suisse has been working closely with Terremark since the company announced its growth plans in early 2006.
Terremark chairman and CEO Manuel Medina called the financing “the final step” in the company’s effort to improve its capital structure and position itself to take advantage of the strength of the data center market. “With our recent acquisition of Data Return, we have all of the pieces of our strategy in place,” said Medina. “This is a very exciting time and we have now positioned Terremark to be a major force in our industry.”
Terremark broke ground this month on a data center campus in Culpeper, Virginia, part of a broader expansion that is expected to also include an addiitonal facility in Silicon Valley. Terremark’s plan for its Virginia site – which will be known as the NAP of the Capital Region – calls for the phased build-out of up to five 50,000 square foot data center facilities. The company expects to invest $55 million to $60 million in construction of the first data center and begin installing customers in June 2008.