Vonage to buy back up to $253.5 million of convertibles in tender

By Susanna Moon

Chicago, Oct. 20 - Vonage Holdings Corp. plans to repurchase up to $253.5 million of its convertible notes in a tender offer that began on July 30, according to a press release and an 8-K filing with the Securities and Exchange Commission.

The tender offer is expected to expire on Nov. 3, the date of the stockholder meeting.

Funding for the buyback will come from cash on hand and proceeds from a $130.3 million senior secured first-lien credit facility, a $72 million senior secured second-lien credit facility and the sale of $18 million of senior secured third-lien convertible notes.

"We are pleased to reach definitive agreement on this refinancing at a time of unprecedented volatility in the credit markets," John Rego, the company's chief financial officer, said in a press release.

"This agreement provides clarity to our partners and suppliers regarding the company's liquidity position in these challenging financial times," Rego said. "We are eager to focus on improving the fundamentals of the business to deliver profitable growth."

Holmdel, N.J.-based Vonage Holdings is a provider of broadband telephone services.

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