Birch Communications Completes $77.5 Million Debt Financing

ATLANTA, June 6, 2011 /PRNewswire/ -- Birch Communications, a leading IP-based telecommunications and managed services provider to small- and medium-sized businesses, is pleased to announce that it has secured a $77.5 million finance package consisting of a senior term loan, a senior revolving credit facility, a tranche of subordinated debt, and a provision for up to a $7.5 million leasing facility. Birch will use this new financing to repay outstanding indebtedness, fund future acquisitions, fund network build-out and for general corporate purposes.

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"We're very proud of Birch and this financing is a milestone for our company. It strengthens our capital structure and lowers our cost of debt which increases our free cash flow and provides us with extra flexibility to pursue our value-creating growth strategy," noted Edward James, Birch's chief financial officer. "Furthermore, securing this financing underscores the confidence that our financial partners have in Birch."

"This funding enables Birch to continue to grow its business and is also confirmation of our overall business strategy," said Vincent M. Oddo, Birch's president and chief executive officer. "I am pleased that this funding will allow us to continue to seek accretive acquisitions, expand our proprietary IP-network and also allow us to expand the scope of our current products and services to better serve our large existing base of customers."

Bank of America led the senior term, revolver, and leasing facility components of the financing along with Silicon Valley Bank. The subordinated debt was provided by Kayne Anderson Mezzanine Partners, LP.  Lazard Freres & Co. LLC acted as the exclusive financial advisor and placement agent to Birch for this transaction.

About Birch Communications

Headquartered in Atlanta, Ga., Birch Communications provides managed communications and information technology services to a target market of small- and medium-sized businesses in select metropolitan areas within 38 states across the United States.  Birch services include local and long distance voice, broadband Internet access, T1, PRI, bonded T1, mobile voice and data, e-mail, voicemail, prepaid, and many other communications and information technology services. Birch voice and data services are, in most cases, delivered using Voice over Internet Protocol

(VoIP) technology on the company's secure IP-Network rather than over the public Internet. According to Inc. 500|5000 magazine in its 2004, 2009 and 2010 rankings, Birch was one of the fastest-growing private companies in the United States.  In 2010, Birch was also named the 7th fastest growing private business in Atlanta, and one of the Top 100 Private Companies in Atlanta, by the Atlanta Business Chronicle. Please visit www.birch.com for more information.

Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 58 million consumer and small business relationships with approximately 5,800 retail banking offices and approximately 18,000 ATMs and award-winning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation ("Investment Banking Affiliates"), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated, which is a registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed.

About Silicon Valley Bank

Silicon Valley Bank is the premier commercial bank for companies in the technology, life science,  venture  capital,  private  equity  and  premium  wine  industries.  SVB  provides  a comprehensive suite of financing solutions, treasury management, corporate investment and international banking services to its clients worldwide. Through its focus on specialized markets and extensive knowledge of the people and business issues driving them, Silicon Valley Bank provides a level of service and partnership that measurably impacts its clients' success. Founded in 1983 and headquartered in Santa Clara, Calif., the company serves clients around the world through 26 U.S. offices and five international operations. Silicon Valley Bank is a member of global financial services firm SVB Financial Group (NASDAQ: SIVB), along with SVB Analytics, SVB Capital, SVB Global and SVB Private Client Services. More information on Silicon Valley Bank can be found at www.svb.com.

About Kayne Anderson Mezzanine Partners, L.P.

Kayne Anderson Mezzanine Partners, with offices in New York, Houston, and Los Angeles, manages $600 million in committed capital and invests in middle market companies across a diverse range of industries, predominantly in North America. For additional information, please visit http://www.kaynecapital.com/mezzanine.

About Lazard Freres & Co. LLC

Lazard Freres & Co. LLC is one of the world's preeminent financial advisory and asset management firms, operates from 42 cities across 27 countries in North America, Europe, Asia, Australia, Central and South America. With origins dating back to 1848, the firm provides advice on mergers and acquisitions, strategic matters, restructuring and capital structure, capital raising and corporate finance, as well as asset management services to corporations, partnerships, institutions, governments, and individuals. For more information, visit www.lazard.com.

SOURCE Birch Communications

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