By Sheri Kasprzak
Atlanta, Feb. 23 - Level 3 Communications Inc. revealed details on its $880 million direct placement.
The company sold $880 million in convertible senior notes to Southeastern Asset Management, Davis Selected Advisers LP, Fairfax Financial Holdings, Legg Mason Opportunity Trust, Markel Corp., MSD Capital LP and The Torray Cos.
The notes mature May 1, 2011 and bear interest at 10% annually payable semi-annually May 1 and Nov. 1, beginning Nov. 1, 2005.
The notes are convertible into common shares after Jan. 1, 2007 at $3.60 per share. For every $1,000 in principal, the notes are convertible into 277.77 common shares.
The notes may be redeemed in whole or in part beginning May 1, 2009 at 103.33% of the principal through 2009 and at 101.67% of the principal from 2010 through maturity.
The notes will rank equal in right of payment with the company's other unsecured and unsubordinated debt.
The notes are being sold under Level 3's shelf registration.
Legg Mason has the right to terminate its commitment if a portion of the Investment Company Act of 1940 prevents its participation, a determination that could be made in a week. If this occurs, the proceeds from the offering will be $780 million.
Based in Broomfield, Colo., Level 3 is a communications and information services company providing wholesale dial-up service to internet service providers. The proceeds from the offering will be used for general corporate purposes, possible acquisitions, working capital, capital expenditures, debt refinancing and debt repurchases.
| Issuer: | Level 3 Communications Inc.
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| Issue: | Convertible senior notes
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| Amount: | $880 million
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| Maturity: | May 1, 2011
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| Coupon: | 10%
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| Price: | Par
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| Yield: | 10%
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| Conversion price: | $3.60 (convertible after Jan. 1, 2007)
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| Conversion ratio: | Into 277.77 common shares for every $1,000 of principal
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| Call: | Redeemable beginning May 1, 2009 at 103.33% of principal through 2009; 101.67% from 2010 through maturity
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| Warrants: | No
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| Investors: | Southeastern Asset Management, Davis Selected Advisers LP, Fairfax Financial Holdings, Legg Mason Opportunity Trust, Markel Corp., MSD Capital LP and The Torray Cos.
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| Pricing date: | Feb. 22
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| Stock price: | $2.28 at close Feb. 22
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| Stock price: | $2.36 at close Feb. 23
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