Talk America calls 12% notes for redemption

New York, Feb. 19 - Talk America said that it has called for redemption $15 million of its 12% senior subordinated notes due 2007.

Talk America, a Reston, Va.-based provider of bundled local and long distance telecommunications services, said that the notes will be redeemed on April 20 at par plus accrued interest.

The company plans to fund the redemption using cash generated from its operations. It expects the transaction to have a positive impact on its net income and earnings per share due to the elimination of interest expense associated with the notes.

The company estimated that as a result of this transaction, its total debt will be reduced to about $18.2 million from $48.6 million at the beginning of 2004 and said that on the redemption date, it expects that its net debt (defined as total long-term debt and short-term debt, less cash and cash equivalents) will be negative and that it will have a net cash balance.

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