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Technology Stocks : Vonage Holdings

VG 8.485

-0.9%

10:12 AM EST

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From: David T. Groves	4/27/2008 10:25:53 AM
	of 141

Citi Upgrades April 25, 2008, 12:32 pm Vonage To Refinance Debt; Citi Upgrades; Stock Rises Vonage (VG) this morning announced that it has signed a non-binding letter of intent for $215 million in private debt financing. The company said two-thirds of the deal will be through a senior secured credit facility and the rest through convertible senior notes. The company says it will use the proceeds along with cash on hand to redeem its $253 million in existing convertible notes, which can be put back to the company on December 16. Vonage says it has $190 million in cash on hand, including $42 million in restricted cash and $148 million that is unrestricted. Citigroup’s Michael Rollins this morning raised his rating on the stock to Hold from Sell on the news, asserting that the financing provides a step forward in resolving its liquidity situation. Rollins does say that the cost of financing is likely to be expensive, which could limit upside for the shares. He maintains his $2 price target. VG this morning is up 15 cents, or 8.3%, to $1.96.

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