UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 4, 2002
TALK AMERICA HOLDINGS, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 000-26728 23-2827736
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(State or Other (Commission (IRS Employer
Jurisdiction of Incorporation) File Number) Identification No.)
TALK AMERICA HOLDINGS, INC.
12020 SUNRISE VALLEY DRIVE
RESTON, VIRGINIA 20191
(Address of Principal Executive Offices, Including Zip Code)
(703) 391-7500
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(Registrant's telephone number, including area code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS
As previously reported, on October 4, 2002, the principal operating
subsidiaries of Talk America Holdings, Inc. (the "Company") retired, prior to
maturity, all of the debt outstanding under the Credit Facility Agreement
("Facility") between the subsidiaries and MCG Finance Corporation.
The Facility was secured by a pledge of all of the assets of the
subsidiaries of the Company that were a party to the Facility. In addition, the
Company had guaranteed the obligations under the Facility. The Facility
subjected the Company and its subsidiaries to certain restrictions and covenants
related to among other things, liquidity, per-subscriber-type of revenue,
subscriber acquisition costs and interest coverage ratio requirements. As a
result of the retirement of the debt under the Facility, the pledge of assets
and the restrictions and covenants under the Facility are terminated.
The scheduled maturity date of the Facility had been June 2005. As a
result of the retirement of this debt prior to maturity, the Company will incur
a one-time, non-cash charge to earnings of approximately $1.1 million in the
fourth quarter of 2002 reflecting the acceleration of the amortization of
certain deferred finance charges and fees that were being amortized over the
original life of the loan. In addition, borrowings under the Facility bore
interest at LIBOR plus 7% (8.9% as of September 30, 2002) per annum. The
retirement of the outstanding debt under the Facility prior to maturity will
allow the Company net cash interest savings of approximately $1.4 million
through the original June 2005 maturity date.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TALK AMERICA HOLDINGS, INC.
Date: October 11, 2002 By: /s/ Aloysius T. Lawn, IV
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Name: Aloysius T. Lawn, IV
Title: Executive Vice President -
General Counsel and Secretary