ST. LOUIS, MO – June 29, 2007 – SAVVIS, Inc. (Nasdaq: SVVS), a global leader in IT infrastructure services for business applications, announced today that it has prepaid $342.5 million of debt obligation related to its 15% paid-in-kind Series A Subordinated Notes issued in February 2004 (the Notes). The payment included $200.0 million of principal, $119.3 million of interest costs and $23.2 million of a negotiated make-whole premium related to early repayment of the notes, which were issued with a maturity date of January 30, 2009. Holders of the Notes agreed to a reduction in the make-whole premium, resulting in savings of $8.6 million compared to the amount owed on the first call date, January 30, 2008. The early repayment eliminates approximately $30.9 million of non-cash interest expense for SAVVIS in 2007 and approximately $67.6 million in 2008.
SAVVIS CEO Phil Koen said, “Early repayment of these 15% in-kind notes is an important step in the ongoing process of strengthening SAVVIS’ capital structure. Our continued success in the market with innovative, industry-leading managed IT infrastructure solutions has driven SAVVIS’ strong growth, making possible the significant improvements in our financial condition we have achieved over the past year. We’re very grateful for the support and confidence our debt holders have demonstrated, and for their flexibility in enabling this early repayment.”
The Notes were originally issued in February 2004 to fund a major acquisition. Terms of the Notes included provision for a make-whole premium in the event of early repayment, equal to $31.8 million as of the first call date, January 30, 2008, which was reduced to $23.2 million through negotiation. SAVVIS’ net income for the second quarter of 2007 will include a charge of approximately $44 million related to the early extinguishment of debt, due to the make-whole associated with the Notes and the write-off of the original issue discount and deferred financing costs.
This document may contain 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 adversely affect actual results are set forth as risk factors described in SAVVIS’ SEC reports and filings, including its annual report on Form 10-K for the year ended December 31, 2006, and all subsequent filings. Those risk factors include, but are not limited to, variability in the availability and terms of financing. The forward-looking statements contained in this document speak only as of the date of publication, June 29, 2007. Subsequent events and developments may cause the company’s forward-looking statements to change, 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 leader in IT infrastructure services for business applications. With an IT services platform spanning North America, Europe, and Asia, SAVVIS is an industry leader 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 22 data centers, and automated management and provisioning systems. For more information, please visit www.savvis.net.: