SBC agrees to $110 million credit line for Prodigy
WASHINGTON, Jan 4 (Reuters) - SBC Communications Inc. (NYSE:SBC), the nation's No. 2 local telephone company, has agreed to make a $110 million credit line available to Prodigy Communications Corp. (NasdaqNM:PRGY), a retail high-speed Internet services provider, a regulatory filing showed on Thursday.
The three-year agreement, signed Dec. 29, will allow Prodigy to receive revolving loans from SBC periodically to be used for general corporate purposes, according to a filing made with the U.S. Securities and Exchange Commission.
``Prodigy continues to look at its business and plans for growth,'' said Andy Zmugg, a spokesman for White Plains, N.Y.-based Prodigy. ``Prodigy can use that credit to continue to grow its business.''
The agreement is contingent on the two parties entering into an amended strategic and marketing agreement by Jan. 19, according to the regulatory filing. Zmugg said more details would be forthcoming in the weeks ahead.
Prodigy must pay SBC interest equal to the one-month London Interbank Offered Rate (LIBOR), 6.05 on Thursday, plus 400 basis points and can be prepaid without any penalty, the filing revealed.
San Antonio, Texas-based SBC owns about 41 percent of Prodigy which it received as part of an alliance struck early last year.
SBC shares closed up 75 cents to $51.75 on the New York Stock Exchange while Prodigy shares closed up 44 cents to $2.25 on Nasdaq. |
