Level 3 starts exchange offer for 9 1/8%, 10½%, 11% notes

By Jennifer Chiou

New York, Dec. 12 - Level 3 Communications, Inc. announced the launch of private offers to exchange any and all of its $954.195 million of 9 1/8% senior notes due 2008, $132.495 million of 11% senior notes due 2008 and $143.582 million of 10½% senior discount notes due 2008.

The company said it will pay cash and issue a maximum of $1.230 billion of new 11½% senior notes due March 1, 2010 in exchange for the old notes.

The offer ends at 11:59 p.m. ET on Jan. 10, unless extended. Those who tender their holdings before 5 p.m. ET on Dec. 22 will receive a $25.00 per $1,000 principal amount (principal amount at maturity for the discount notes) early participation payment.

For each $1,000 principal amount of notes or principal amount at maturity, Level 3 said it will issue $1,000 of new 11½% notes and pay $65.00 for its 9 1/8% notes, $95.00 for its 11% notes and $62.00 for its 10½% notes. The figures include the $25.00 early participation payment.

The company said the goal of the exchange offers is to improve financial flexibility by extending the maturities of its notes and reducing the amount of its notes due 2008.

The offers are conditioned upon tenders from holders of at least half of the old notes. The company said holders of about 42% of the old notes have indicated intent to exchange their notes.

Level 3 Communications is a Broomfield, Colo., communications and information services company.

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