BROOMFIELD, Colo., December 13, 2006 - Level 3 Communications, Inc. (Nasdaq: LVLT) today announced that its subsidiary, Level 3 Financing, Inc., has agreed to sell $650 million aggregate principal amount of 9.25% Senior Notes due 2014 in a private offering to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 and outside the United States under Regulation S under the Securities Act of 1933. The senior notes were priced at 101.75% of the principal amount plus accrued interest from October 30, 2006, representing an effective yield of 8.86% to the purchasers of these senior notes.
The senior notes represent an additional offering of the 9.25% Senior Notes due 2014 that were issued on October 30, 2006. The notes are being offered as additional notes under the same indenture as the 9.25% Senior Notes issued on October 30, 2006, and will be treated under that indenture as a single series of notes with the outstanding 9.25% Senior Notes.
The debt represented by the new notes will be used to (i) purchase Level 3 Financing’s 10.75% Senior Notes due 2011 tendered in a tender offer, which was launched by Level 3 Financing today, (ii) to the extent that less than all of the 10.75% Senior Notes due 2011 are purchased in the tender offer, to effect a satisfaction and discharge under the indenture governing the 10.75% Senior Notes due 2011 or otherwise repurchase in any lawful manner those 10.75% Senior Notes due 2011 that remain outstanding after the tender offer, and (iii) pay fees and expenses incurred in connection with the foregoing. Gross proceeds from the offering of senior notes that exceed the amount necessary to repurchase or refinance the 10.75% Senior Notes due 2011, will constitute purchase money indebtedness under the existing indentures of Level 3 and will be used solely to fund the cost of construction, installation, acquisition, lease, development or improvement of any Telecommunications/IS Assets (as defined in the existing indentures of Level 3), including the cash purchase price of any past, pending or future acquisitions.
The senior notes will not be 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.
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.
