SMART Modular Technologies Inc. (SMOD) announced that it recently repurchased $26.2 million aggregate principal amount of its senior secured floating rate notes due 2012 at a discount. Using $25 million cash on hand, the company paid 95.5% of the principal or face amount of the notes to acquire and retire such debt early. The aggregate principal amount outstanding under the notes is now $55.1 million, down from $81.3 million.
By using cash on hand to extinguish almost one-third of its long-term debt, the company expects to save $1.5 million in annual interest expense based on the current interest rate under the notes of approximately 5.8%.
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