Pemstar obtains more favorable banking terms from lenders

Pemstar Inc. (NASDAQ:PMTR) announced that it has secured more favorable terms for its revolving line of credit with its domestic lending institutions, which is led by Wachovia Capital Finance Corporation (Central), formerly known as Congress Financial Corporation (Central).

Key highlights of changes from the existing arrangements included in the Amended and Restated Loan and Security Agreement dated July 3, 2006, include:
--  Increases the Revolving Loan Commitment from $40 million to $45 million and decreases the Tranche B Loan Commitment from $10.5 million to $9 million.
--  Extends the maturity date of the Agreement by one year to October 19, 2010.
--  Reduces the interest rate on the Revolving Loans to prime rate plus a range from 0% to 0.75%, depending on Company liquidity; or to LIBOR plus a range from 2.00% to 2.75%, depending on Company liquidity.
--  Reduces the interest rate on the Tranche B Loans to prime rate plus 4.75% from prime rate plus 6.00%.
--  Increases the monthly payments on the Tranche B Loans to $400,000 per month from $250,000 per month.

Greg Lea, Pemstar's EVP and CFO, stated: "We value the partnership we have with our banks and are very pleased with their continued confidence in our future. These new terms provide Pemstar enhanced financial flexibility that will allow us to maintain our focus on profitable growth initiatives, while also lowering our borrowing costs."