Bloomberg News

Level 3 Communications Said Increase Loan by $300 Million

November 04, 2011

(Updates with new size in first paragraph)

Nov. 3 (Bloomberg) -- Level 3 Communications Inc., the broadband-services provider, increased the size of a term loan B it’s seeking to repay convertible debt by $300 million to $550 million, according to a person with knowledge of the transaction.

The financing, due in September 2018, will pay 4.25 percentage points more than the London interbank offered rate, said the person, who declined to be identified because the terms are private. Libor, a rate banks charge to lend to each other, will have a 1.5 percent floor.

Level 3 is proposing to sell the loan at 95 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.

Lenders are being offered soft-call protection of 101 cents until Oct. 4, 2012, meaning Level 3 would have to pay 1 cent more than face value to refinance the debt before that date, the person said.

Bank of America Corp. and Citigroup Inc. are arranging the deal for the Broomfield, Colorado-based company, the person said.

Investors had until 4 p.m. today in New York to submit commitments, said the person, who declined to be identified because the terms are private. The company was originally seeking responses tomorrow by 1 p.m. in New York.

Francie Bauer, a spokeswoman for Level 3, confirmed the size of the financing. She declined to comment further until the offering is closed.

In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t. A term loan B is mainly bought by non-bank lenders such as collateralized loan obligations, bank-loan mutual funds and hedge funds.

--Editors: Faris Khan, Sharon L. Lynch

To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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