ITC^DeltaCom Refinances Debt

WEST POINT, Ga. -- ITC^DeltaCom, Inc. (Nasdaq: ITCD - News), a leading provider of integrated communications services to customers in the southeastern United States, today announced that it has closed its previously announced financing of approximately $239 million with a group led by Tennenbaum Capital Partners, LLC ("Tennenbaum"). Tennenbaum is a Santa Monica, California based private investment firm managing more than $3.5 billion in capital through private funds.

Approximately $209 million of the new funding, secured by a first lien on the Company's assets, was used to repay in full the Company's existing senior credit facility and $30 million, secured by a third lien on the Company's assets, will be available for general corporate purposes. Approximately $56 million of loans secured by a second lien on the Company's assets and $20 million of loans secured by a third lien have been amended and remain outstanding. All of the loans mature in 2009, and no principal repayments are required until maturity.

"We are extremely pleased to make today's announcement, which is a testament to the hard work of our employees and the loyalty of our customers," said Randall E. Curran, ITC^DeltaCom's Chief Executive Officer. "With our significantly enhanced financial position, I look forward to leading the ITC^DeltaCom team in pursuing our goal of becoming the nation's most innovative CLEC."

"We are pleased to welcome Tennenbaum as a new partner at ITC^DeltaCom and are gratified by this further demonstration of confidence in the Company," said Thomas E. McInerney, a general partner of Welsh, Carson, Anderson & Stowe, ITC^DeltaCom's majority stockholder, and ITC^DeltaCom's Chairman.

As part of the foregoing financing transactions, the Company has issued Tennenbaum warrants to purchase 9,000,000 shares of a new issue of Series C Preferred Stock, which will initially be convertible into 12,000,000 shares of common stock. In addition, Tennenbaum has the right to name two members to the Company's board of directors.

"We share the excitement this transaction creates for both Tennenbaum and our new partners," said Michael E. Tennenbaum, Senior Managing Partner of Tennenbaum. "We look forward to working with the ITC^DeltaCom team as they grow the Company."

Miller Buckfire & Co., LLC acted as the Company's financial advisor on this transaction. Additional information about the foregoing financing transactions will be contained in the Company's current report on Form 8-K to be filed with the Securities and Exchange Commission.

In addition, the Company announced today that Cam Lanier, a founder and long-time director of the Company, is leaving the board. The board today appointed Clyde A. Heintzelman as a director and a member of the Company's audit committee. Mr. Heintzelman currently serves as an audit committee member of two other public company boards.

ITC^DeltaCom Inc.