Internap Amends Credit Agreement
October 7th, 2008 By: Rich Miller
Internap Network Services (INAP) has amended its credit agreement with Bank of America to “simplify its capital structure, add additional flexibility and improve its liquidity position,” the company said Monday. The agreement gives the company more time to repay the loan, while adding a requirement that the company maintain a cash balance of $10 million. Internap also said that it has expanded its presence in several European markets.
In its agreement with Bank of America, Internap (INAP) consolidated a two-tier agreement into a single revolving loan. Under the amended credit facility, Internap will convert its existing $20 million term loan balance and outstanding letters of credit with Bank of America into a $35 million revolving loan. The agreement extends repayment terms from quarterly payments that were to begin in the third quarter to a single principal repayment due in 2011. Additional details are available in the SEC filing.
“I am pleased that Bank of America has the confidence in our business plan to provide Internap with this additional financial flexibility and capacity,” said George Kilguss, chief financial officer of Internap. “We continue to be well-positioned in growing markets and are focused on providing network and hosting services to run business critical Web sites with 100% reliability.”
Internap says the amendment also preserves $10 million of borrowing capacity for the company. The new facility allows the company to make capital expenditures of up to $55 million through Dec. 31, 2008, a period in which the company has projected capex of $45 million to $50 million. It also sets a capex limit of $25 million a year in fiscal 2009 and beyond.
Internap also has announced that it will lease space in Interxion data centers in London and Amsterdam. The company has doubled its footprint in the Interxion London facility in response to a sharp rise in customer demand. Internap now has 44 data center locations around the world.
“Interxion brings all the ingredients our customers need together under one roof in London,” said Daniel Beazer, General Manager, Internap UK. “Our customers have access to the latest high-specification space, an exceptional platform for our IP networking and CDN services and, with 13 megawatts of power, the data centre can easily meet our customers’ medium-to-high power capacity requirements.”