CenturyLink reveals structure on $10.2 billion debt commitment

By Sara Rosenberg

New York, Dec. 15 – CenturyLink Inc. disclosed details in an S-4 filed with the Securities and Exchange Commission on Thursday on its $8 billion senior secured credit facility and $2,225,000,000 senior secured bridge loan commitments that will be used to help fund the acquisition of Level 3 Communications Inc.

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., MUFG, Barclays, J.P. Morgan Securities LLC, Wells Fargo Securities LLC, RBC Capital Markets, Goldman Sachs Bank USA, SunTrust Robinson Humphrey Inc., Mizuho Bank, Regions Bank, Fifth Third Bank, Credit Suisse Securities (USA) LLC and U.S. Bank provided the debt commitment.

The credit facility consists of a $2 billion revolver with estimated pricing of Libor plus 275 basis points, a $1.5 billion term loan A estimated at Libor plus 275 bps and a $4.5 billion term loan B estimated at Libor plus 400 bps with a 0.75% Libor floor.

It is expected that the bridge loan will be replaced with the issuance of senior secured notes or other debt securities.

Under the agreement, Level 3 shareholders will receive $26.50 per share in cash and a fixed exchange ratio of 1.4286 shares of CenturyLink stock for each Level 3 share they own, which implies a purchase price of $66.50 per Level 3 share. The transaction is valued at about $34 billion, including the assumption of debt.

Other funds for the transaction are expected to come from cash on hand.

At closing, CenturyLink shareholders will own around 51% and Level 3 shareholders will own about 49% of the combined company.

The combined company is expected to have pro forma net leverage of less than 3.7 times at close, including run-rate synergies.

Closing is expected by the end of the third quarter of 2017, subject to regulatory approvals, approval of CenturyLink and Level 3 shareholders and other customary conditions.

CenturyLink is a Monroe, La.-based communications, hosting, cloud and IT services company. Level 3 is a Broomfield, Colo.-based provider of communications services to enterprise, government and carrier customers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.