UPDATE 1-Savvis cuts '07 revenue view; prepays $342.5 mln debt

(Adds details, Reuters Estimates)

June 29 (Reuters) -Savvis Inc. SVVS.O lowered its fiscal 2007 revenue outlook after it sold its assets in two adjacent data centers in Santa Clara, California, to Microsoft Corp. (MSFT.O) for $200 million.

Microsoft has been the sole customer in the data centers under a colocation contract due to expire at the end of 2010. This contract generated about $16.5 million of revenue for the first half of 2007, the telecommunications carrier said.

For 2007, the company now sees total revenue of $805 million to $820 million, down from its prior view of $820 million to $835 million. Analysts on average expect $827.6 million, according to Reuters Estimates.

Separately, the company also said it will take a charge of $44 million in the second quarter, after it prepaid $342.5 million of debt.

The early repayment of debt related to its 15 percent Series A subordinated notes issued in February 2004 will reduce non-cash interest expense by about $30.9 million in 2007 and about $67.6 million in 2008, the company said. (Reporting by Purwa Khandelwal in Bangalore)