The Allentown, Pa. telecommunications-equipment company, in a filing with the Securities and Exchange Commission, said it didn't renew the credit facility and paid down the remaining balance on its term loan due September 30.

Agere also emphasized that its current cash and cash equivalents balance of $ 900 million would be sufficient enough to meet its cash requirements, including previously announced restructuring actions.

The news Tuesday pushed the company's shares sharply lower on the New York Stock Exchange. At 4 p.m. EDT, shares of Agere were down 11 cents, or 10%, to 99 cents a share.

"I guess that means people think they might need the credit line," said Kevin Slocum, analyst with SoundView Technology Group. He owns no Agere stock and his firm has no investment banking relationships with the company.

Mr. Slocum said while investors don't like companies with large debt positions, they do like companies to have ample access to cash, the Catch-22 being that if that cash is needed, investors become even more worried.

"We believe (Agere) has sufficient cash, and it is highly likely you will probably see another credit line negotiated," Mr. Slocum said. "I think a smaller credit line will be more appropriate."

The company agrees. And with the capital markets demanding a heavy toil these days for access to cash, Agere officials said it was in the company's and shareholders' best interest to let this credit facility lapse.

"The market conditions made it difficult for use to find favorable terms and conditions that were in the best interest of our business and shareholders," said Agere spokeswoman Vibha Agrawal. "(The credit facility) just wasn't that crucial. With $900 million in cash, we have sufficient liquidity to complete our restructuring, allowing us to be both operating income and cash-flow positive at $500 million of quarterly revenue."

"We will continue to look for financing opportunities that are beneficial for the company," she added.

Mr. Slocum reiterated his "outperform" rating on the stock, as he believes the company's cash position is adequate to meet its cash requirements over the next year. In addition, he sees Agere's decision to exit the depressed optical- components business as a positive.

"The exit from the optical-component business will reduce the company's loss potential and, we believe that it may allow the company to renegotiate a suitably smaller [credit line] with less restrictive covenants," he wrote in a note.

Others on Wall Street expressed similar views.

"We believe the headline risk of this facility not being renewed is more dramatic than reality, as we expect shareholders would have viewed the tapping of this facility as a negative in any event," noted UBS Warburg analyst Joseph Wolf, who reiterated his "buy" rating on the stock.

The firm disclosed no investment banking relationship with the company, but noted the analyst, a member of his team, or one of their household members has a long position in Agere.