Level 3 Communications, Inc. ("Level 3") (Nasdaq: LVLT) today announced that Level 3 Finance, LLC ("Level 3 Finance"), its first tier, wholly owned subsidiary, has completed its "Modified Dutch Auction" tender offers for a portion of Level 3's senior debt and convertible debt securities described below.
Each tender offer expired on October 22, 2001, at 11:59 p.m., New York City time. The table below sets forth, as of the expiration of each tender offer (1) the principal amount of each series of Notes validly tendered, (2) the principal amount of each series of Notes to be purchased by Level 3 Finance and (3) the purchase price per $1,000 (or 1,000 in the case of the Euro Notes) principal amount (or principal amount at maturity, as applicable), of Level 3's 9 1/8% Senior Notes due 2008, 10 1/2% Senior Discount Notes due 2008, 10 3/4% Senior Notes due 2008, 11 1/4% Senior Notes due 2010, 11% Senior Notes due 2008, 11 1/4% Senior Notes due 2010, 12 7/8% Senior Discount Notes due 2010, 6% Convertible Subordinated Notes due 2009 and 6% Convertible Subordinated Notes due 2010 tendered in each tender offer. The purchase prices listed below apply to Notes tendered without specifying a price and Notes tendered at or below the applicable purchase price.
| Series of Notes | Principal Amount Tendered in millions |
Principal Amount to be Purchased in millions |
Purchase Price per $1,000 (or ?1,000) Principal Amount |
| 9 1/8% Notes | $569,978 | $569,978 | $450 |
| 10 1/2% Discount Notes* | $395,114 | $125,000 | $210 |
| 10 3/4% Euro Notes | 147,021 | 147,021 | 440 |
| 11 1/4% Euro Notes | 183,053 | 183,053 | 440 |
| 11% Notes | $358,458 | $358,458 | $480 |
| 11 1/4% Notes | $115,196 | $115,196 | $460 |
| 12 7/8% Discount Notes* | $231,440 | $100,000 | $150 |
| 2009 Convertible Notes | $80,388 | $80,388 | $220 |
| 2010 Convertible Notes | $71,182 | $71,182 | $220 |
| * Principal amount at maturity | |||
Since the principal amount of validly tendered 10% Discount Notes and 12 7/8% Discount Notes exceeded the principal amount of each such series that Level 3 Finance was seeking to purchase, Level 3 Finance accepted for payment Notes of such series as follows. First, Level 3 Finance accepted for payment all Notes of each such series that were tendered at prices below the purchase price for that series. Next, Level 3 Finance accepted for payment such Notes of that series that were tendered at the applicable purchase price on a pro rata basis from among the tendered Notes of that series. The proration factor for each such series of Notes is as follows:
| Series of Notes | Proration Factor | ||
| 10 1/2% Discount Notes* | 62.495% | ||
| 12 7/8% Discount Notes* | 79.089% | ||
| * Principal amount at maturity | |||
Level 3 Finance will pay the aggregate purchase price including accrued interest through October 24, 2001, approximately $720.6 million, to the depositary for those Notes accepted for payment on Thursday, October 25, 2001, and all Notes not accepted for payment will be promptly returned to holders.
Salomon Smith Barney and J.P. Morgan Securities Inc. served as the dealer managers and Mellon Investor Services LLC served as both the information agent and the depositary in connection with the tender offers.
Level 3 is aware that the various issuances of its outstanding senior notes, senior discount notes and convertible subordinated notes continue to trade at discounts to their respective face or accreted amounts. In order to continue to reduce future cash interest payments, as well as future amounts due at maturity, Level 3 or its affiliates may, from time to time, purchase these outstanding debt securities for cash or exchange shares of
Level 3 common stock for these outstanding debt securities pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended, in open market or privately negotiated transactions. Level 3 will evaluate any such transactions in light of then existing market conditions. The amounts involved in any such transactions, individually or in the aggregate, may be material.
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.
