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Allegiance Telecom taps bank credit

Allegiance Telecom announced Tuesday that it will borrow $350 million made available through an existing lending agreement. The telecommunications carrier completed a deal with its banks in February of last year for potential loans worth a total of $500 million. The Dallas, Texas-based company will draw down two loans of $150 million and $200 million that it must pay back by 2007 at an interest rate of 6.28 percent. Allegiance, which provides telecommunications services to businesses, will invest the $350 million in short-term U.S. Treasury securities. The company now has about $662 million in cash including the $312 million the company claimed at the end of the second quarter. Allegiance CFO Thomas Lord said in an interview that the company will use its cash to continue to expand its network to 36 markets in the United States.

Allegiance Telecom announced Tuesday that it will borrow $350 million made available through an existing lending agreement. The telecommunications carrier completed a deal with its banks in February of last year for potential loans worth a total of $500 million. The Dallas, Texas-based company will draw down two loans of $150 million and $200 million that it must pay back by 2007 at an interest rate of 6.28 percent.

Allegiance, which provides telecommunications services to businesses, will invest the $350 million in short-term U.S. Treasury securities. The company now has about $662 million in cash including the $312 million the company claimed at the end of the second quarter. Allegiance CFO Thomas Lord said in an interview that the company will use its cash to continue to expand its network to 36 markets in the United States.