News

ATM ISO Cardtronics will pay off debt early

July 30, 2010

Cardtronics Inc.’s chief financial officer said the ATM ISO will improve its financial position through early payment of $100 million in senior subordinated notes.

The Houston-based company will pay off the Series B notes’ principal and interest Aug. 20, 2010, three years earlier than the 2013 due date, J. Christopher Brewster wrote in a United States Securities and Exchange Commission filing.

Cardtronics will spend $30 million in available company cash on hand and $70 million from a $175 million credit facility the firm recently arranged with JPMorgan Chase & Co. of New York and Bank of America Corp.  of  Charlotte, N.C.  Cardtronics disclosed in a July 20 SEC filing that it had received the credit facility, and Chase was the administrator.

“Our new bank facility and the notes’ redemption are targeted to achieve three objectives,” Brewster said. “Those are to enhance our financial flexibility, to reduce leverage and to reduce interest expense. We now have more flexibility to use our free cash flow drawings under the revolving credit facility to achieve those objectives.”

The ATM deployer currently is paying 9.25 percent annual interest on senior debt.  The company, however, will pay 3 percent interest annually on the banks’ credit facility, the SEC filing said.

The early payoff, however, requires Cardtronics to record a one-time, pre-tax, non-cash charge of approximately $3.3 million in the third quarter in connection with redemption of the senior subordinated notes.

Cardtronics is the world’s largest non-bank owner of ATMs with 33,700 machines in the United States, United Kingdom, Mexico and Puerto Rico.