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Rackspace Draws $150m Credit web hosting news |
Want to add a web hosting news article ? Just do'it, it's free! Use submit form for hosting news!| Rackspace Draws $150m Credit Oct 14, 2008 | Web hosting provider Rackspace Hosting (www.rackspace.com) announced on Friday it has drawn an additional $150 million on its revolving line of credit in response to recent economic uncertainities in the credit and bank markets.
Rackspace maintains a healthy economic status as a provider of managed hosting, email hosting and cloud hosting, with 33,000 customers and 2007 revenues of $362 million. In drawing from its credit line now, Rackspace avoids any possibly setbacks that may occur if the banking sector takes a further hit.
In August, Rackspace went public, filing an initial public offering of 15 million shares at an estimated price of $12 to $16 per share.
"We continue to maintain a strong capital position with the liquidity we need to grow our business over the long term," says Bruce Knooihuizen, CFO of Rackspace Hosting. "Including operating cash, we now have more than $250 million in cash, cash equivalents and short-term investment."
The web host had previously borrowed $50 million on its line of credit, backed by Comerica Bank, JPMorgan Chase, Wachovia Bank, Bank of America and The Frost National Bank. Rackspace also has an additional $44 million in "available and committed" on a revolving credit line.
At the end of the third quarter of 2008, Rackspace had $200 million outstanding on its revolving line of credit.
The company have swapped $50 million of these borrowings into a fixed rate of 4.135 percent, borrowing the remaining $150 million on a three months LIBOR basis at 3.762 percent.
On Friday afternoon, Rackspace shares fell 40 cents, or 6.6 percent, to $5.66, before it reached a 52-week record low of $5.58 earlier that day. | Reads: 987 | Category: General | Source: TheWHIR : Web Host Industry Reviews
URL source: http://www.thewhir.com/marketwatch/101408_Rackspace_Draws_150m_Credit.cfm
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