Cardtronics to redeem all $100 million in 9¼% senior notes due 2013

By Devika Patel

Knoxville, Tenn., July 21 - Cardtronics, Inc. said it will redeem all $100 million of its 9¼% series B senior subordinated notes due 2013 at 102.313 plus interest through Aug. 20, the redemption date.

The redemption will be funded with approximately $30 million of available cash on hand plus about $70 million of borrowings under the company's new $175 million revolving credit facility.

"Our new bank facility and the notes redemption are targeted to achieve three objectives," chief financial officer Chris Brewster said in a press release. "Those are to enhance our financial flexibility, to reduce leverage, and to reduce interest expense. We now have more flexibility to use our free cash flow and drawings under the revolving credit facility to achieve those objectives.

"Specifically, the notes redemption transaction utilizes this flexibility to significantly reduce annual interest expense by applying available cash (which is currently earning 0.5% per annum) and bank borrowings (which currently cost approximately 3% per annum) to redeem bonds on which we are paying an interest rate of 9¼% per annum.

"We expect to continue to generate significant free cash flow and now have the flexibility to use that cash flow over time to pay down the bank debt taken on to fund the bond repurchase, which will further reduce leverage and interest expense."

Cardtronics is a Houston-based non-bank operator of ATMs.

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