ST. LOUIS, MO – June 13, 2005 – SAVVIS, Inc. (NASDAQ: SVVS), a leading global IT utility, announced today that it has entered into an $85.0 million senior secured revolving credit facility (the “Facility”) with Wells Fargo Foothill, Inc., as arranger and administrative agent, and has repaid its $53.7 million capital lease agreement with General Electric Capital Corporation (the “Lease”). At current interest rates, SAVVIS expects savings in cash interest expense of approximately $1.0 million in 2005 and $2.7 million in 2006, compared to the payments required under the Lease. In addition to repaying the Lease, SAVVIS may use the Facility for working capital, the issuance of up to $15 million in letters of credit, and other general corporate purposes. The Facility will mature in November 2008.
SAVVIS Chief Financial Officer Jeff Von Deylen commented, “This new credit facility both reflects and contributes to continued improvement in SAVVIS’ financial condition. Our improved Adjusted EBITDA performance since our March 2004 acquisition of certain assets of Cable & Wireless has provided an opportunity to lower our interest costs, eliminate certain restrictive financial covenants, and increase our financial flexibility. We remain confident that SAVVIS will achieve Adjusted EBITDA of $55-65 million in 2005, and are revising our projection for cash interest expense payments from $15-16 million to $14-15 million. We have been pleased to partner with GECC, which supported SAVVIS from its earliest years, and look forward to a mutually beneficial relationship with our new partner Wells Fargo Foothill.”
SAVVIS will use the initial borrowing of $58.0 million under the Facility to repay $53.9 million of principal outstanding and accrued interest under the Lease, and to pay fees and expenses associated with the refinancing. In addition, SAVVIS will use $9.8 million against the Facility for existing standby letters of credit. Following these borrowings, SAVVIS will have a remaining borrowing capacity of $17.2 million under the Facility. The interest rate on the Facility is variable, based on LIBOR market rates, with an interest rate at the time of the initial borrowing of 1-month LIBOR plus 3.00%, currently 6.2%. Interest on the repaid Lease was 9%, which was scheduled to increase to 12% in September 2005. For full details on the terms of the Facility, please see SAVVIS’ Form 8-K to be filed with the U.S. Securities and Exchange Commission on or before June 16, 2005.
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from SAVVIS’ expectations. Certain factors that could affect actual results, including but not limited to risks related to SAVVIS’ revenue streams, indebtedness and financing, are set forth as risk factors described in SAVVIS’ SEC reports and filings, including its annual report on Form 10-K and all subsequent filings. SAVVIS encourages investors to review those factors carefully before making any investment decision. The forward-looking statements contained in this document speak only as of today’s date, June 13, 2005, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.
SAVVIS, Inc. (NASDAQ: SVVS) is a global IT utility services provider that focuses exclusively on IT solutions for businesses. With an IT services platform that extends to 47 countries, SAVVIS has over 5,000 enterprise customers and leads the industry in delivering secure, reliable, and scalable hosting, network, and application services. These solutions enable customers to focus on their core business while SAVVIS ensures the quality of their IT systems and operations. SAVVIS’ strategic approach combines virtualization technology, a global network and 24 data centers, and automated management and provisioning systems. For more information about SAVVIS, visit: .