Vonage finally inks refinancing

Vonage today announced it will refinance $253 million in convertible debt, pending a shareholder vote on the deal.

Silver Point Finance LLC will fund $202.3 million of the debt in a tiered system, including a first-tier $130.3 million security in senior convertible notes and $72 million second lien credit facility. Silver Point will also purchase $18 million in convertible third-tier notes from Vonage, according to company release.

Vonage plans to purchase the difference of around $33 million with cash on hand. These finalized plans put to rest speculation that Vonage might not find a taker for the refinancing of the debt facility, which was set to mature in 2009. Vonage has struggled in the past few quarters to grow its subscriber base. The company, which floated the tender offer June 30, 2008, announced on Friday that it was extending the offer for the fourth time.

John Rego, Vonage CFO, said in a release,"This agreement provides Vonage with the financial stability to focus on increasing profitability while continuing to provide customers with innovative, feature-rich phone service."

The company's stockholders will vote on the proposed purchase of the debt Nov. 3, 2008, at a special meeting.

For more:
- see the company release here 

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