Pre-Paid Legal Services Receives Additional $10 Million Loan Commitment
Pre-Paid Legal Services, Inc. today announced that it has received from Bank of Oklahoma a commitment for $10 million in additional financing, which will be available as soon as a definitive agreement is finalized which is expected in the next few days.
We expect to use proceeds from the financing to fund additional treasury stock purchases. We currently have Board authorization to purchase approximately 726,000 additional treasury shares.
The commitment provides for funding of $10 million to finance stock repurchases with a single principal payment maturity date of December 1, 2006 and interest payable monthly at the 30 day LIBOR Rate plus three percent, adjusted monthly. The definitive agreement will contain normal financial and reporting covenants, similar to those in our previous lines of credit. The loan is primarily secured by our rights to receive membership fees on a portion of our memberships.
Since April 1999, we have purchased 10.3 million shares, totaling $252.8 million, or an average cost per share of $24.61 per share. As a result of this aggressive treasury stock purchase program, we have reduced shares outstanding by 38% during this time.