TelePacific Completes $80 Million Senior Credit Facility

LOS ANGELES, California, January 13, 2006 -- TelePacific Communications, a leading provider of business telecommunications network solutions with headquarters in California, announced that it has successfully completed syndication of an $80 million senior credit facility to a group of institutional investors.

Credit Suisse First Boston acted as lead arranger for the transaction and GE Commercial Finance will remain the TelePacific's administrative agent. The facility is comprised of a $70 million term loan due in 2010 and a $10 million revolving line of credit. The proceeds of the facility were used to retire existing bank debt and for general corporate purposes. The $10 million revolving line of credit was not drawn at closing.

TelePacific, whose largest shareholders are affiliates of Investcorp SA and private equity investors Clarity Partners L.P., serves more than 14,000 business customers throughout California and in Las Vegas Nevada, which has an addressable population of over 35 million.

"The new bank facility is a very significant, positive accomplishment for TelePacific. The quality and breadth of investors that participated strongly reaffirms our own belief in this company, our strategy and our prospects for future growth," said Dick Jalkut, TelePacific's president and CEO.

TelePacific has generated market-leading customer and revenue growth and customer retention rates over the past four years through its disciplined approach of providing outstanding customer service over its facilities based network.

2005 highlights included:

• Annual revenues that grew to approximately $182 million on a run-rate basis for the quarter ending December 31, 2005 compared with $120 million in fiscal year 2004;
• The addition of 125,000 access lines to achieve approximately 400,000 lines in service by the end of 2005;
• An average monthly customer line churn of less than 0.9%;
• A customer satisfaction rating to 97%; and
• The acquisition of Pac-West's small and medium-sized business customers.

"TelePacific's successful placement of this new senior credit facility highlights its strengthening financial performance, enhanced operating capability and exceptional management team," said Lars Haegg, Managing Director at Investcorp.

Clint Walker, General Partner with Clarity Partners, said, "The recently completed refinancing transaction will provide TelePacific with the capability to continue to grow the business while providing a superior customer experience."

About TelePacific
With thousands of business customers, TelePacific Communications is a leading provider of business telecommunications network solutions providing local, long-distance, data and Internet services to small-to-medium sized businesses in California and Nevada. Headquartered in California with local consultants, service, support and facilities, TelePacific offers solutions, provisions service and provides customer service where its customers do business. For more information, visit www.telepacific.com.

About Investcorp
Investcorp is a global investment group with offices in London, New York and Bahrain. The firm has four lines of business: private equity, real estate investment, hedge funds and venture capital. It was established in 1982 and has since completed transactions with an aggregate value of approximately $28 billion. The Firm now manages total investments in alternative assets of approximately $8.6 billion

In Europe, Investcorp and its clients currently own corporate investments that include Polyconcept, APCOA, Hilding Anders and Minimax. In the United States, Investcorp and its clients currently own corporate investments that include American Tire, Associated Materials and Source Media. Further information is available at www.investcorp.com.

About Clarity Partners L.P.
Clarity Partners is a private equity investment firm based in Los Angeles, California, which invests exclusively in media, communications, and related technologies and services. The firm's partners have extensive experience in successfully creating, investing in, managing, and financing companies at all stages of development. Clarity works with its portfolio companies' management teams to establish or grow dynamic companies with leading positions in their target market segments. Further information can be found at www.claritypartners.net.

Contact: Rebecca Levin
Phone: (213)213-3622 or (800) 200-7904
 

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