Level 3 extends tender offers for 2.875%, 6% convertibles, reduces minimum tender condition

By Angela McDaniels

Tacoma, Wash., Dec. 16 - Level 3 Communications, Inc. said it extended the tender offers for its $354.54 million outstanding 2.875% convertible senior notes due 2010, $481.67 million outstanding 6% convertible subordinated notes due 2010 and $305.14 million outstanding 6% convertible subordinated notes due 2009 to midnight ET on Dec. 22 from Dec. 15.

Level 3 also lowered each offer's minimum tender condition, according to a company news release.

The minimum amount of tendered notes the company needs to complete each offer is now $162 million, or 45.7%, for the 2.875% convertibles, $173 million, or 35.9%, for the 6% convertibles due 2010 and $135 million, or 44.2% for the 6% convertibles due 2009.

Previously, each offer had a 50% minimum tender condition.

The offers began on Nov. 17. As of Dec. 15, holders had tendered $163.76 million of the 2.875% convertibles, $174.42 million of the 6% convertibles due 2010 and $137.46 million of the 6% convertibles due 2009.

For each $1,000 principal amount, the company is offering $620 for the 2.875% convertibles, $700 for the 6% convertibles due 2010 and $920 for the 6% convertibles due 2009. Holders will also receive accrued interest up to but excluding the payment date.

The offer for the 2.875% convertibles is conditioned on the acceptance by the company of its 6% convertibles due 2010 and vice versa. The offer for the 6% convertibles due 2009 is conditioned on the acceptance by the company of both its 2.875% convertibles and 6% convertibles due 2010.

Level 3 waived the financing condition for the tender offers that required it to sell at least $373 million of new 15% convertible senior notes due 2013.

The company waived the condition on Dec. 8 after investors who agreed to purchase $360.12 million of Level 3's 15% convertibles in a negotiated offering deposited the purchase price into escrow.

Proceeds from the offering and cash on hand will be used to fund the tender offer.

The release of the escrowed funds is conditioned on, among other things, the minimum tender conditions being met in the offers for the 2.875% convertibles and 6% convertibles due 2010.

Citi (800 558-3745 or 212 723-6106) and Merrill Lynch & Co. (888 654-8637 or 212 449-4914) are the dealer managers, and Global Bondholder Services Corp. (212 430-3774 or 866 873-6300) is the information agent.

Level 3 a Broomfield, Colo.-based provider of fiber-based communications services.

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