Telegroup Issues $97 Million Aggregate Principal Amount at Maturity of its Senior Discount Note Financing
Fairfield, Iowa, October 24, 1997 --- Telegroup, Inc. (NASDAQ: TGRP) announced today the issuance and sale of $97,000,000 aggregate principal amount at maturity of its 10.5% Senior Discount Notes due 2004. The Company announced that the net proceeds of approximately $72,300,000 from the placement would be used to further expand the Telegroup Intelligent Global Network, to upgrade Telegroup's billing and accounting systems and for working capital and other general corporate purposes, including potential acquisitions.
The Notes will accrete in value from the date of issuance to May 1, 2000, at a rate of 10.5% per annum, compounded semi-annually. Cash interest on the Notes will neither accrue nor be payable prior to May 1, 2000. Commencing May 1, 2000, interest will be payable in cash on the Notes semi-annually in arrears on each May 1, and November 1, at a rate of 10.50% per annum. The Notes will mature on November 1, 2004.
Telegroup is a global alternative provider of long distance telecommunications services, offering a broad range of discounted international, national, value-added wholesale and enhanced telecommunications services to approximately 268,000 small- and medium- sized businesses, residential and wholesale customers in over 180 countries worldwide.
Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995: This press release contains statements which are not historical facts and may be considered forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, such as statements regarding expected future performance of the Company. Telegroup's actual results might differ materially from those projected by those statements due to numerous factors, including the Company's success in developing its business plan and acquiring additional financing needed to meet this plan, foreign currency fluctuations, termination of certain operating agreements, and changes in tax law.
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