Level 3 plans to sell $175 million six-year convertibles to yield 6.25%-6.75%, up 22.5%-27.5%

By Rebecca Melvin

New York, Sept. 13 - Level 3 Communications Inc., a known issuer of convertibles bonds, planned to price $175 million of six-year convertible senior notes after the market close Tuesday that were talked to yield 6.25% to 6.75% with an initial conversion premium of 22.5% to 27.5%, according to a syndicate source.

There is a greenshoe for a further $26.25 million.

Bank of America Merrill Lynch is the bookrunner of the registered deal, with Citigroup Global Markets Inc. as a joint lead manager.

Co-managers are Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc.

The convertibles will be non-callable for three years and then become provisionally callable if the stock exceeds 150% of the conversion price.

Proceeds are for general corporate purposes, including working capital, capital expenditures and potential repurchase or redemption of the company's 5.25% convertible senior notes due 2011 and other existing debt from time to time.

Level 3 is a Broomfield, Colo.-based internet backbone services provider.

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