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PAETEC lightens its debt load
PAETEC may be just as vulnerable to the ongoing economic recession as the rest of us, but one area where it appears to be gaining the upper hand is in paying down its debt. The Rochester, NY-based CLEC announced this week that it has reduced its debt load by $10 million--the second time in six months.
This latest debt reduction reflects an ongoing trend for PAETEC. PAETEC cut its borrowing by $20 million since the end of the second quarter of 2009. In addition to paying down its debt, PAETEC earlier this year repositioned about $300 million in debt out to 2017.
Reducing its debt load is a positive move for a service provider that has suffered a number of setbacks due to the current economic recession. During the third quarter, the CLEC reported $6.5 million in losses and in 2008 it had to cut 5 percent or 200 employees from its workforce.
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- Xchange has this article
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Comments
Posted by Terry | December 18, 2009 - 11:24am
This payment was against our revolving debt facility (Essentially our credit card) and allows for dynamic action. Another important 2009 event you missed in this article is that our leadership team made a masterstroke earlier this year by repositioning about $300 million in debt out to 2017 at an advantageous rate.
The benefits were twofold: one was in the static nature of the new debt facility's interest rate (important considering any sane analysis of interest rate movement) and the second was that the company removed itself from a crowded field of borrowers with debt maturing in 2012-14?
Finally, I'm not sure of the exact numbers, but you should consult with PAETEC to see exactly how many EMPLOYEES were cut in 2008 and how many have been rehired or offered new positions. I don't think your number reflects the end result of that story.
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