US telco Level 3 Communications has refinanced a US$815m loan on more favourable terms, which will save it US$10m per year.
It has replaced a term loan, which carried interest at Libor plus 3.75% due 2019, with a facility that has the same maturity, but…
US telco Level 3 Communications has refinanced a US$815m loan on more favourable terms, which will save it US$10m per year.
It has replaced a term loan, which carried interest at Libor plus 3.75% due 2019, with a facility that has the same maturity, but a lower fixed rate of Libor plus 3%. The new terms also include a lower Libor floor – 1% rather than 1.5%.
The transaction was priced to lenders at par and completed yesterday. In a statement Level 3 said it expected to save US$10m of cash interest expense per year until 2019 under the new agreement.
According to an SEC filing, Merrill Lynch Capital Corporation acted as administrative and collateral agent while Bank of America and Citigroup were joint lead arrangers and joint book running managers. Morgan Stanley, Credit Suisse, Jefferies and JP Morgan also acted as joint book running managers.
The refinancing marks the company’s first visit to the debt market this year after an active 2012, when it refinanced US$3.4bn in loans and sold US$1.2bn in notes.
In its Q2 results Level 3 posted US$8bn in net debt, a net debt to adjusted EBITDA ratio of 5.1x. It generated US$1.4bn revenues in the quarter and reported EBITDA of US$387m.
Level 3 offers network services across 55 countries. It owns fibre networks and undersea cables serving enterprise and government clients. It also offers wholesale services to consumer-focused operators.
Earlier this month, the Colorado-based telco was linked with a bid for Polish fixed-line operator GTS Central Europe. An acquisition could reportedly cost more than US$650m.
Level 3’s former COO Jeff Storey was appointed CEO in April, replacing James Crowe.
