BTI Telecom Receives Commitment for $90 Million of Additional Financing From Welsh, Carson, Anderson & Stowe.

Business Editors

RALEIGH, NC--(BUSINESS WIRE)--March 15, 2001

Also Receives Commitments From GE Capital, Bank of America and

Export Development Corporation To Refinance and Extend $89 Million

of Existing Credit Facilities 

Plans to Use WCAS and Bank Financing to Support Growing Sales

Efforts and Make Interest Payments on Existing Bonds

BTI Telecom Corp. (BTI), a leading integrated communications provider in the Southeast, announced today that it has received a commitment from Welsh, Carson, Anderson & Stowe (WCAS), a leading private equity firm, to provide $90 million in additional financing. Separately, BTI has signed commitment letters with its current lenders, GE Capital, Bank of America, and Export Development Corporation to refinance and extend $89 million in existing credit facilities, subject to the conditions of such commitment letters. BTI believes the new credit facility will provide the Company with greater flexibility to execute its business plan.

The new commitment of $40 million in equity financing and $50 million in debt financing from WCAS, which is in addition to the $210 million in equity previously invested by WCAS, and the replacement credit facility fully fund BTI's current business plan. BTI plans to use the financing to support sales growth, make bond interest payments and for general working capital purposes.

With annualized revenues in excess of $280 million, BTI is one of the largest privately held integrated communications providers (ICPs) in the country and is a leading regional provider of bundled voice and data products in the Southeast. BTI provides voice and data communications services to small and medium sized businesses primarily in the Southeastern United States. BTI has sales offices in 28 cities and over 30,000 business customers. The Company owns and operates 4,300 miles of fiber, with the recent completion of an additional 500 miles, 14 local Lucent 5E switches, 25 frame relay and 5 ATM switches. The Company has demonstrated successful execution of its local and data strategy, having grown local and data revenue by 70% during 2000.

Thomas E. McInerney, a WCAS General Partner and BTI director, said, "We remain pleased with our partnership with BTI, which executed on its local and data strategy during 2000 and completed a network infrastructure build-out. With their strong sales force, we believe BTI has a significant market opportunity to aggressively grow its business in the Southeast."

The additional WCAS funding and refinancing of BTI's credit facilities are expected to be completed in early April. Under the terms of the WCAS agreement, WCAS will have four representatives on BTI's Board of Directors and the right to appoint a majority of the directors in the future. The closing of the WCAS agreement and the replacement credit facility are subject to execution of definitive documentation, regulatory approvals and other customary closing conditions.

"Securing this additional financing in such a difficult market confirms BTI's strengths and the opportunity we have to become the leading ICP in the Southeast," said Peter T. Loftin, BTI's Chairman and CEO. "We look forward to working with WCAS to continue to provide high-quality bundled voice and data products to our customers and aggressively expand our customer base."

About Welsh, Carson, Anderson & Stowe

WCAS, founded in 1979, is one of the leading private equity firms in the country, with capital under management exceeding $12 billion. The firm focuses exclusively on making private equity investments in the information services, communications and healthcare industries. In addition to this investment into BTI, WCAS has sponsored a number of recent transactions with leading communications companies including Amdocs Ltd., Centennial Communications Corp., SpectraSite Holdings, and Valor Telecommunications.

About BTI Telecom

BTI (http://www.btitele.com ) is a facilities-based integrated communications provider (ICP) serving primarily small and medium-sized business customers in the southeastern United States since 1983. The Company offers a full suite of integrated retail services to business customers, including local, long distance, data, Internet access, frame relay, paging, Web design and hosting, and other enhanced services. The Company also offers wholesale services, including switched, private line, special access and prepaid calling card services to other telecommunications carriers and end-user customers. BTI has five Alcatel USA 600E digital long distance switches in Raleigh, Atlanta, Orlando, Dallas and New York. BTI has also successfully deployed 14 Lucent 5E 2000 local switches throughout the Southeast. BTI's fiber network covers approximately 4,300 route miles across the eastern United States.

Forward-Looking Statements

Statements contained in this news release regarding planned financial transactions and other events are forward-looking statements, subject to uncertainties and risks, including but not limited to the Company's negative cash flow after capital expenditures, significant near-term capital requirements, restrictions on the ability to execute strategies or complete certain transactions as a result of its capital structure or debt covenants, ability to manage growth and expansion (including into the local services market), regulation, competition and dependence on key personnel. These and other applicable risks are detailed in Company's filings with the Securities and Exchange Commission.