Terremark (AMEX:TWW)
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From Jun 2019 to Jun 2024
Terremark Worldwide, Inc. (AMEX:TWW) today announced that it has secured
financing of $27.25 million from Credit Suisse to fund its previously
announced expansion plans. The proceeds from this financing will allow
the Company to secure two properties, one in Silicon Valley and one in
the Washington D.C. area, and begin signing customer contracts for the
new facilities. In addition, a portion of the proceeds will be used to
build-out the remaining 10,000 square feet at its current Silicon Valley
facility.
"We are excited to have this financing in place, which will allow us to
move forward with our expansion strategy and leverage the significant
customer demand we are seeing in these two markets," said Manuel D.
Medina, Chairman and CEO of Terremark Worldwide, Inc. "With this funding
we can begin contracting with both new and current customers for the two
facilities, which will provide a solid foundation to lower our cost of
capital as we secure the balance of the financing."
The financing is composed of 3 facilities, each having a maturity date
of June 30, 2009. All interest under each facility will be payable in
kind and will be due and payable in cash at maturity. The table below
shows the details for each facility.
Facility
Amount
Initial Rate
Conversion
Subordinated Debt
$ 10,000,000
LIBOR + 8.0%
n/a
Convertible Debt
$ 4,000,000
0.50%
$ 8.14
Lease Commitment
$ 13,250,000
LIBOR + 5.5%
n/a
Approximately $8.0 million of the debt proceeds will be used to fund the
final build-out of the existing facility in Silicon Valley and the
remaining $6.0 million will be primarily used towards the development of
the new facilities.
The $13.25 million under the lease commitment will be used towards the
purchase of the new properties in Silicon Valley and the Washington D.C.
area. Under the lease commitment, Credit Suisse will purchase each
parcel of land and lease it to Terremark. Terremark maintains the option
to purchase the properties from Credit Suisse at the original purchase
price plus accrued interest.
In connection with this transaction, the Company agreed to a 1% increase
in the interest rate of its senior secured notes in consideration for a
six month acceleration of its prepayment premium. This increase is
subject to a minimum amount of $300,000 and additional future rate
increases that will not exceed 1%. The prepayment premium on the senior
secured notes, which had been scheduled to reset on June 30, 2007, will
immediately decrease to 5.0% from 7.5%.
Mr. Medina concluded, "We are very pleased to have Credit Suisse
directly invest in our expansion and provide funding for this initial
step in our financing plan. This liquidity and the lowered prepayment
premium on our existing senior notes significantly increases our ability
to improve our capital structure. We will begin working immediately on
replacing this interim funding with permanent expansion financing."
About Terremark Worldwide, Inc.
Terremark Worldwide, Inc. (AMEX:TWW) is a leading operator of integrated
Tier-1 Internet exchanges and a global provider of managed IT
infrastructure solutions for government and private sectors. Terremark
delivers its portfolio of services from seven locations in the U.S.,
Europe and Latin America and from four service aggregation and
distribution locations, which aggregate network traffic and distribute
network-based services in Europe and Asia to meet specific customer
needs. Terremark's flagship facility, the NAP of the Americas, is the
model for the carrier-neutral Internet exchanges the company has in
Santa Clara, California (NAP of the Americas/West), in Sao Paulo, Brazil
(NAP do Brasil) and in Madrid, Spain (NAP de las Americas - Madrid). The
carrier-neutral NAP of the Americas is a state-of-the-art facility that
provides exchange point, colocation and managed services. Terremark is
headquartered at 2601 S. Bayshore Drive, 9th Floor, Miami, Florida USA,
305-856-3200. More information about Terremark Worldwide can be found at http://www.terremark.com.
Statements contained in this press release may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Terremark's actual results may
differ materially from those set forth in the forward-looking statements
due to a number of risks, uncertainties and other factors, as discussed
in Terremark's filings with the SEC. These factors include, without
limitation, Terremark's ability to obtain funding for its business
plans, uncertainty in the demand for Terremark's services or products
and Terremark's ability to manage its growth. Terremark does not assume
any obligation to update these forward-looking statements.