Tags: Level 3 | debt | financing | loan

Level 3 Said to Seek $595.5 Million Loan to Repay 2016 Debt

Tuesday, 13 Aug 2013 04:13 PM

Level 3 Financing Inc., a unit of the U.S. telecommunications company with operations in 55 countries, is seeking a $595.5 million term loan due in 2020 to repay bank debt that comes due in 2016, according to a person with knowledge of the transaction.

Bank of America Corp., Citigroup Inc., Morgan Stanley, Credit Suisse Group AG, Jefferies Group Inc., and JPMorgan Chase & Co. are arranging the financing and hosted a lender meeting at 10:30 a.m. today in New York, said the person, who asked not to be identified because the information is private.

Level 3, based in Broomfield, Colorado, yesterday said it refinanced an $815 million term portion at 3 percentage points more than the London interbank offered rate with a 1 percent minimum on the lending benchmark, down from 3.75 percentage points more than Libor with a 1.5 percent floor.

The company’s debt due in 2016 currently pays interest at 3.25 percentage points more than Libor with a 1.5 percent minimum on the lending benchmark, according to data compiled by Bloomberg.

Lenders to the new financing will have to let the banks know by 5 p.m. tomorrow whether they will participate in the deal, the person said.

Moody’s Investors Service today assigned a Ba3 rating to the proposed loan while Fitch Ratings graded the debt one level higher, at BB.

Fitch has a “positive” outlook on the company, stating that ratings will likely be increased as Level 3 “demonstrates that it can consistently generate positive free cash flow and reduce leverage to 5.5 times or below,” analysts led by David Peterson wrote in the report.

As of June 30, leverage, or debt to earnings, was 5.4 times, according to Fitch, down from 5.85 times on Dec. 31 and 6.54 times a year earlier.

Level 3 has no “significant” maturities scheduled until 2015, when about $775 million of debt comes due, according to Fitch.

© Copyright 2015 Bloomberg News. All rights reserved.

1Like our page

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved