Vonage Secures Refinancing Package (VG)

By Douglas A. McIntyre Updated Apr 28, 9:23AM EDT · Published Oct 20, 8:14AM EDT

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Vonage Holdings Corp. (NYSE: VG) has signed a definitive agreements to refinance its convertible debt, a move which will help to secure its future. The financing package consists of a $130.3 million senior secured first lien credit facility, a $72.0 million senior secured second lien credit facility, and the sale of $18.0 million of senior secured third lien convertible notes.

The lenders under the first and second lien senior facility and thepurchasers of the convertible notes are listed as Silver Point Finance,LLC and certain affiliates, as well as other third party lenders andaffiliates of Vonage.

Vonage will use the net proceeds of the financing along with its owncash on hand to repurchase up to $253.5 million of the company’sexisting convertible notes in a tender offer commenced on July 30,2008.

Vonage will have to hold a special shareholder meeting with a vote toapprove this measure along with the potential issuance of shares ofcommon stock upon the conversion of the convertible notes. The companynoted that it has already obtained binding agreements from stockholdersin aggregate to obtain approval, but a special meeting of stockholdersis set for November 3.

This is the lifeblood that shareholders were hoping would come tofruition. Shares are responding as well this morning. Friday’s closewas $0.82 and the first indications are up almost 30% on very thinvolume. Where this ultimately trades today may depend more on theattention given to other low-priced active stocks. Its 52-week tradingrange is $0.57 to $2.70.

Jon C. Ogg
October 20, 2008

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.