May 24, 2007 — (WEB HOST INDUSTRY REVIEW) — Managed Web hosting provider Rackspace Managed Hosting (rackspace.com) announced on Wednesday that it has entered a revolving credit and term loan agreement with Comerica Bank and JPMorgan Chase.
The credit facility, worth $45 million, can be used for temporary financing arrangements, while the $25 million term loan can be tapped to finance growth-related capital expenditures, such as new hardware and data center build outs.
“These facilities from Comerica and JPMorgan Chase provide Rackspace with growth capital to help support our forecasted expansions on attractive terms enabling us to further enhance our award winning Fanatical Support,” said Major Horton, chief financial officer of Rackspace. “As the company builds out facilities and expands into new markets, the revolver-based structure will enable the company to lower its cost of capital while also giving it the capability to pursue attractive business opportunities that are consistent with Rackspace’s long-term strategy.”
Last week, it was reported that Rackspace was using Brocade’s storage area network solutions to support the growth of its managed backup and storage division.
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