US fibre-based infrastructure provider Level 3 Communications announced yesterday that its subsidiary Level 3 Escrow is planning to offer US$500m in senior notes maturing in 2019.
In a statement, Level 3 said the notes would carry a fixed interest rate…
US fibre-based infrastructure provider Level 3 Communications announced yesterday that its subsidiary Level 3 Escrow is planning to offer US$500m in senior notes maturing in 2019.
In a statement, Level 3 said the notes would carry a fixed interest rate and would be offered to institutional buyers.
The lead bookrunners for the offering are BoA Merrill Lynch and Citigroup. The other bookrunners are Credit Suisse, Deutsche Bank and Morgan Stanley.
The gross proceeds of the offering would be deposited into a segregated escrow account until certain escrow conditions are satisfied. These conditions concern (but are not limited to) Level 3’s acquisition of the data centre company Global Crossing and the assumption of the notes by Level 3 Financing, another Level 3 subsidiary.
After the release of the escrow notes, the net proceeds will be used to refinance Global Crossing’s debt. The gross proceeds will go on reducing the outstanding bridge commitment Level 3 had in place in order to refinance Global Crossing’s debt.
Level 3 had received US$1.75bn in committed financing from BoA Merrill Lynch and Citigroup in order to fund the transaction.
This financing package was composed of a US$1.1bn 12-month bridge loan and a US$650m 6-year senior secured term loan.
Moody’s gave the Level 3 US$500 bond offering announced today a Caa1 credit rating.
The credit rating agency noted that if the Global Crossing deal fell through, Level 3 would have to pay back the full principal of the offering to the bondholders.
Level 3 announced on 11 April that it had agreed to acquire Global Crossing in a deal worth US$3bn, including US$1.1bn in Global Crossing debt.
Level 3’s advisers for the deal were BoA Merrill Lynch, Citigroup and Morgan Stanley, while Rothschild also provided a fairness opinion.
Global Crossing was advised by Goldman Sachs.
Level 3 said in April that it anticipated the deal being closed by the end of 2011.
