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PEER 1 Hosting Secures $US75 Million in New Credit Facilities

November 15, 2010 by  

Web Hosting ServicesVANCOUVER, BC – PEER 1 Network Enterprises, Inc. (TSX:PIX), operating as PEER 1 Hosting, a leading provider of online IT infrastructure, today announced that it has entered into a credit agreement with a syndicate of lenders led by National Bank Financial Inc. (NBF) and including Business Development Bank of Canada (BDC), Laurentian Bank and Canadian Western Bank, for a US$45 million non-revolving term facility and a US$30 million revolving credit facility. In addition, an accordion feature allows PEER 1 Hosting to request an increase in the amount available under the revolving facility by a further $25 million, bringing the total potential credit available under the facilities to US$100 million. The credit facilities are subject to customary conditions, the adherence to certain financial covenants and are secured by the assets of the Company and its subsidiaries. Availability of the new facilities is subject to satisfaction of certain conditions precedent, which is expected to occur in the next several weeks.

“Securing access to a significant amount of non-dilutive capital at favourable rates leaves us very well positioned to execute on our global growth strategy,” said Fabio Banducci, President and CEO of PEER 1 Hosting. “In the near term this includes expansion of our Toronto data facility and a contemplated build out of a dedicated European facility, while also granting us maximum flexibility to pursue additional opportunities across a range of geographies and service offerings.”


The five-year non-revolving term facility has a principal amount of US$45 million, available in both US and Canadian funds, of which US$25 million will be drawn at closing and used to repay indebtedness under existing facilities to NBF. Advances under the term facility will be at Prime Rate, US Base Rate or LIBO Rate plus a margin of between 1.25% and 3.25%, with the applicable margin dependent upon the Company’s ratio of funded net debt to EBITDA at the time funds are drawn. The term loan will be available for repayment of existing credit facilities and capital expenditures.

The five-year revolving credit facility has a principal amount of US$30 million, available in both US and Canadian funds, and will be used to repay the residual indebtedness under existing facilities to NBF, with the remaining balance available for general corporate purposes, permitted acquisitions and distributions. Advances under the revolving facility will be at Prime Rate, US Base Rate, or LIBO Rate plus a margin of between 1.25% and 3.25%, with the applicable margin dependent upon the Company’s ratio of funded net debt to EBITDA at the time funds are drawn.

About PEER 1 Hosting
PEER 1 Hosting believes in the limitless opportunity of the Internet, and the business growth potential it provides for its more than 10,000 customers. As a global online IT hosting provider, PEER 1 Hosting offers a reliable high performance Internet network supporting scalable managed hosting, dedicated hosting through the ServerBeach brand, and colocation solutions. Backed by its 100 percent uptime guarantee and 24x7x365 FirstCall Support™, PEER 1 Hosting ensures customers’ online presence is always fast, always available. Since 1999, PEER 1 Hosting has grown to include 17 state-of-the-art data centres and points-of-presence throughout North America and Europe. The company’s headquarters are in Vancouver, Canada, with European operations headquartered in Southampton, UK. PEER 1 Hosting shares are traded on the TSX under the symbol PIX. For more information visit: www.peer1.com or www.peer1hosting.co.uk.

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