Level 3 Communications, the IP-based communications solutions provider, has announced plans to refinance US$1.2bn in debt with a new senior secured term loan due 2019.
The company said Level 3 Financing, its wholly-owned subsidiary, is looking to…
Level 3 Communications, the IP-based communications solutions provider, has announced plans to refinance US$1.2bn in debt with a new senior secured term loan due 2019.
The company said Level 3 Financing, its wholly-owned subsidiary, is looking to refinance a tranche B II term loan and tranche B III term loan under its existing senior secured credit facility, which was initially borrowed in late 2011.
Level 3 Financing’s tranche B II term loan was agreed in August 2011 at US$650m, and matures in September 2018. It carries interest equal to 4.25% over Libor, with the benchmark set at a minimum of 1.5%.
Its tranche B III term loan is for US$550m and has the same maturity, interest, and Libor floor.
BofA Merrill Lynch is leading the refinancing with Citigroup. The new US$1.2bn term loan has been rated B+ by Standard & Poor’s and Ba3 by Moody’s.
Other banks listed as joint bookrunners for the original loans are Morgan Stanley, Deutsche Bank, Credit Suisse and Wells Fargo. Willkie Farr & Gallagher acted as general counsel for the 2011 loans, while Cravath Swaine & Moore legally advised the joint lead arrangers.
The company has been a frequent visitor to the debt markets since last year’s US$3bn acquisition of IP solutions provider Global Crossing, as it seeks to refinance its substantial debt burden. It posted long-term debt of US$8.2bn in its Q2 2012 results in July.
Level 3’s latest debt was secured last month, when it priced a US$775m senior bond due 2020 with a 7% coupon at par. The proceeds of this are being used, together with cash on hand, to redeem all of its outstanding 8.75% senior notes due 2017.
Citigroup, BofA Merrill Lynch, Morgan Stanley, Credit Suisse, Deutsche Bank and JP Morgan were joint bookrunning managers for the sale.
This bond came shortly after Level 3 secured a US$1.42bn dual-tranche credit facility, as well as closing a US$300m bond offering. Since the beginning of this year, including its latest transaction, the company has refinanced around US$3.5bn.
A spokesperson declined to discuss whether the company was looking to refinance further debt this year, saying that its approach to the capital markets was opportunistic.
