New Issue: Level 3 sells upsized $325 million convertibles at 2.875%, up 19.07%

By Ronda Fears

Nashville, July 2 - Level 3 Communications Inc. sold an upsized $325 million of seven-year convertibles at par to yield 2.875% with a 19.07% initial conversion premium, sole book-runner Citigroup.

The issue, boosted from $250 million, sold at the aggressive end of yield talk and the cheaper end of premium guidance.

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.

Terms of the new deal are:

Issuer: Level 3 Communications Inc.

Issue:	convertible senior notes
Lead manager:		Citigroup (books)
Joint managers:	Credit Suisse First Boston, JPMorgan, Merrill Lynch and Morgan Stanley
Amount	$325 million, up from $250 million
Greenshoe:	$48.75 million, up from $37.5 million
Maturity:	July 2010
Coupon:	2.875%
Price:	par
Yield:	2.875%
Conversion premium:	19.07%
Conversion price:	$7.18
Conversion ratio:	139.2758
Call:	noncallable for 4 years, then with 150% hurdle and make-whole for coupons
Price Talk:	2.875-3.375%, up 18-22%
Rating(s):	S&P: CC
Pricing Date:	July 1, after the close
Settlement:	July 8

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