LEVEL 3 COMMUNICATIONS ANNOUNCES $1.375 BILLION BANK FACILITY AND $750 MILLION CONVERTIBLE SUBORDINATED DEBT OFFERING
Proceeds To Substantially Pre-fund Phase 4 of Business Plan
BROOMFIELD, COLORADO September 7, 1999 – Level 3 Communications, Inc. (Nasdaq: LVLT) today announced that it has received a commitment for $1.375 billion of senior secured credit facilities and, in addition, that it intends to offer $750 million in Convertible Subordinated Notes. Level 3 currently intends to use the net proceeds of the offering and the credit facility for working capital, capital expenditures, acquisitions and other general corporate purposes in connection with the implementation of its business plan, including the acquisition of telecommunications assets. These transactions will allow the company to continue its philosophy of 'pre-funding' the phases of its business plan. In particular, the proceeds from both the offering and the credit facility will allow the company to substantially pre-fund the fourth phase of the company?s five phase business plan.
Senior Secured Credit Facilities
The commitment for the $1.375 billion of senior secured credit facilities is from The Chase Manhattan Bank, Goldman Sachs Credit Partners L.P., Morgan Guaranty Trust Company of New York, and Citicorp USA, Inc. Chase Securities Inc. is acting as sole lead arranger and book manager. Each of Goldman, Sachs Credit Partners L.P., J.P. Morgan Securities, Inc. and Salomon Smith Barney Inc. are acting as co-syndication agents. The facility is comprised of a senior secured revolving credit facility in the amount of $650 million and a two-tranche senior secured term loan facility aggregating $725 million. The facility is currently in general syndication and is subject to customary conditions for a transaction of this type, including completion of definitive documents and finalization of terms and conditions.
Level 3 expects to close the facility by the end of September 1999. Convertible Subordinated Notes The company also announced today that it intends to offer $750 million aggregate principal amount of Convertible Subordinated Notes due 2009 in an underwritten offering. The offering will be made by a group of underwriters being led by Goldman, Sachs & Co., Salomon Smith Barney Inc., Chase Securities Inc., Credit Suisse First Boston Corporation, J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated. Goldman, Sachs & Co. and Salomon Smith Barney Inc. are acting as co-lead managers with Goldman, Sachs & Co. acting as sole book running manager.
The company currently expects that the offering will be completed in the third week of September 1999. A registration statement relating to the Convertible Subordinated Notes has been declared effective by the Securities and Exchange Commission. Offers and sales of these Notes may be made only by the related prospectus and prospectus supplement, which may be obtained from any of the underwriters referred to above.
The company also announced that it has increased the network facilities it expects to have completed at the end of its five phase business plan as follows:
Additionally, the company announced that at August 1, 1999, local network development was underway in 22 U.S. cities and that the number of U.S. cities with operational facilities-based local metropolitan networks totaled 14. Also at August 1, 1999, the company had secured 2.7 million square feet of space for gateway facilities, which vary in size.
About Level 3 Communications
Level 3 Communications, Inc. (NASDAQ: LVLT), an international communications company, operates one of the largest Internet backbones in the world, connecting 180 markets in 18 countries. The company serves a broad range of wholesale, enterprise and content customers with a comprehensive suite of services including: Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice and voice over IP services, content delivery and media distribution services. These services provide the building blocks to enable Level 3’s customers to meet their growing demands for advanced communications solutions. The company’s Web address is www.Level3.com.
"Level 3 Communications,” "Level 3," the red 3D brackets and the Level 3 Communications logo are registered service marks of Level 3 Communications, LLC in the United States and/or other countries. Level 3 services are provided by wholly owned subsidiaries of Level 3 Communications, Inc. Any other service, product or company names recited herein may be trademarks or service marks of their respective owners.
Forward-Looking Statement
Some of the statements that we make in this press release are forward looking in nature. These statements are based on management’s current expectations or beliefs. These forward looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside our control, which could cause actual events to differ materially from those expressed or implied by the statements. The most important factors that could prevent us from achieving our stated goals include, but are not limited to our ability to: successfully integrate acquisitions; increase the volume of traffic on our network; defend our intellectual property and proprietary rights; develop new products and services that meet customer demands and generate acceptable margins; successfully complete commercial testing of new technology and information systems to support new products and services; attract and retain qualified management and other personnel; and meet all of the terms and conditions of our debt obligations. Additional information concerning these and other important factors can be found within Level 3’s filings with the Securities and Exchange Commission. Statements in this press release should be evaluated in light of these important factors. Level 3 is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
