BROOMFIELD, Colo., October 1, 2003 - Level 3 Communications, Inc. (Nasdaq:LVLT) announced today that it has repaid in full the $1.125 billion of purchase money debt obligations outstanding under its senior secured credit facility. As a result, the senior secured credit facility has been terminated.
Level 3 repaid the senior secured credit facility with proceeds from the recently completed private offering of Senior Notes by its subsidiary, along with restricted cash of $400 million and approximately $243 million of unrestricted cash on hand.
In connection with the repayment of the senior secured credit facility, Level 3 has decreased consolidated long-term debt by $625 million and reduced its consolidated annual interest expense. Additionally, as a result of the termination, covenants contained in the senior secured credit facility have been eliminated, and the first significant maturities on the company’s outstanding long-term debt now begin in 2008.
Pro forma for these transactions and the issuance of approximately $374 million of Senior Convertible Notes in July 2003, Level 3 had approximately $1.2 billion in cash on hand, including $150 million of restricted cash, at the end of the second quarter 2003.
| Reconciliation to Cash Balance ($ in millions) |
June 30, 2003 |
| Cash, Cash Equivalents and Restricted Cash (1) | $1,458 |
| Net proceeds from 2.875% Convertible Senior Notes due 2010 (2) | $362 |
| Net proceeds from 10.75% Senior Notes due 2011 (3) | $487 |
| Less payment in full of senior secured credit facility (4) | ($1,125) |
| Less prepayment fee on senior secured credit facility | ($4) |
| Pro Forma Cash, Cash Equivalents and Restricted Cash (1) | $1,178 |
The senior notes have not been registered under the Securities Act of 1933 or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws. This press release is not an offer of the senior notes for sale in the United States.
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.
