SAVVIS (SVVS)

Changes in Liquidity and Capital Resources

On December 8, 2008, the Company extended its existing revolving facility by entering into an Amended and Restated Credit Agreement, or the Credit Agreement, with Wells Fargo Foothill, Inc., as arranger and administrative agent. The Credit Agreement provides for a $50.0 million senior secured revolving credit facility, of which up to $40.0 million may be used for the issuance of letters of credit. The Credit Agreement will mature in December 2011. Under the terms of the Credit Agreement, the Company may elect to pay interest on a base rate or LIBOR rate, plus an applicable margin. As of December 31, 2008, the interest rate, including margin would have been 7.50%, however, there were no outstanding borrowings under the Credit Agreement. There were approximately $24.8 million outstanding letters of credit as of December 31, 2008.

In June 2008, one of our subsidiaries, SAVVIS UK Limited, entered into a loan agreement, or the UK Loan Agreement, with Lombard North Central Plc, or Lombard, which provides for borrowings of up to £35.0 million to be used in connection with the construction and development of a new data center in the United Kingdom. The UK Loan Agreement has a five-year term and requires installments of interest only for the first two years and installments of principal and interest for the remainder of the term. The interest incurred through the construction period, which ended September 30, 2008, was added to the principal balance of the loan. We currently maintain a letter of credit of £7.3 million, to be renewed annually, and up to a maximum of £14 million until at least December 31, 2013. As of December 31, 2008, outstanding borrowings under the UK Loan Agreement totaled £32.4 million, or approximately $47.9 million, with an effective interest rate of 4.98%. This interest rate was subject to the terms of an interest rate swap agreement which fixed the effective interest rate at 8.11%, as described in the following paragraph.

In September 2008, we entered into an interest rate swap agreement, or the Swap Agreement, with National Westminster Bank, Plc, or NatWest, to hedge the quarterly interest payments incurred and paid under the UK Loan Agreement during the three year period beginning October 1, 2008 and ending September 30, 2011. Under the terms of the Swap Agreement, we owe quarterly payments to NatWest at a fixed LIBOR interest rate of 5.31%, and receive from NatWest payments based on the same notional amount at the three month LIBOR interest rate set quarterly at the beginning of each quarter. The Swap Agreement effectively fixes the three month LIBOR interest rate payments owed to Lombard under the terms of the UK Loan Agreement at 8.11% for the three year period ending September 30, 2011. During the year ended December 31, 2008, we recognized no hedge ineffectiveness in the consolidated statement of operations. As of December 31, 2008, we had recorded a non-current liability of $3.5 million in relation to the fair value of the Swap Agreement.

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For further information on the Credit Agreement, the UK Loan Agreement, or any other long-term debt, please refer to Note 6 of Notes to Consolidated Financial Statements located in this Annual Report on Form 10-K. For further information regarding the Swap Agreement, please refer to Note 7 of Notes to Consolidated Financial Statements.