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Level 3 $250 million convert talked to yield 2.875-3.375%, up 18-22%
By Ronda Fears
Nashville, June 30 - Level 3 Communications Inc. launched $250 million of seven-year convertibles talked to yield 2.875% to 3.375% with an 18% to 22% initial conversion premium.
Citigroup is lead manager of the Rule 144A deal, which is scheduled to price after the close Tuesday.
The senior notes will be noncallable for four years, then with a 150% to 175% hurdle and make-whole provision for coupon payments if called early.
Also Monday, Level 3 reaffirmed its guidance for second quarter and 2003. Level 3 is reaffirming the projections that the company issued on April 24, 2003, although certain line item components of its consolidated guidance numbers may be different from what was presented in Level 3's first quarter 2003 earnings press release.
At that time, Level 3 said it expected total revenue of $945 million, including $425 million from the communications business, $500 million from information services and $20 million from other businesses. Analysts polled by Thomson First Call were predicting total revenue of $938 million and a loss of 58 cents a share.
There is a $37.5 million greenshoe available on the convertible offering.
Proceeds from the new convertible will be used for working capital, capital expenditures and general corporate purposes including new product development, debt repurchases and acquisitions.
Level 3 has two other convertibles outstanding - a 6% due 2009 and 6% due 2010.
The 2009 issue was quoted off 0.25 point to 73.625 bid, 75.625 offered and the 2010 issue off 0.125 point to 73.375 bid, 75.375 offered.
Level 3 stock closed Monday off 8c, or 1.19% to $6.66.
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