LEVEL 3 COMMUNICATIONS, INC. (LVLT) (Caa1/CCC+) said Tuesday (Oct. 23) that it had completed its previously announced "modified Dutch auction" tender offers for a portion of its senior debt and convertible debt securities. Level 3 said that as of the time the offer expired, at 11:59 P.M. ET on Oct. 22, it had accepted for purchase $569.978 million of its 9 1/8% senior notes due 2008, at a purchase price of $450 per $1,000 principal amount. It accepted for purchase €147.021 million of its 10¾% euro-denominated senior notes due 2008 and €183.053 million of its 11¼% euro-denominated senior notes due 2010, both at a price of €440 per €1,000 principal amount. It accepted for purchase $358.458 million of its 11% senior notes due 2008, at a price of per $480 per $1,000 principal amount. It accepted for purchase $115.196 million of its 11¼% senior notes due 2010, at a price of $460 per $1,000 principal amount. It accepted for purchase $80.388 million of its 6% convertible subordinated notes due 2009 and $71.182 million of its 6% convertible subordinated notes due 2010, both at a price of $220 per $1,000 principal amount. All of the amounts accepted for purchase are the same as the amounts tendered by the holders. The purchase prices apply to notes tendered without specifying a price and notes tendered at or below the applicable purchase price. Additionally, Level 3 accepted for purchase $125 million of its zero-coupon/10½% senior discount notes due 2008, out of the $395.114 million tendered for purchase; the purchase price is $210 per $1,000 principal amount at maturity. It also accepted for purchase $100 million of its zero-coupon/12 7/8% senior discount notes due 2010, out of the $231.440 million tendered for purchase; the purchase price is $150 per $1,000 principal amount at maturity. Since the principal amount of validly tendered senior discount notes exceeded the amount of each issue that Level 3 was seeking to purchase, the company first accepted for payment all notes of the respective series which were tendered at prices below the purchase price for that series, followed by notes which were tendered at the applicable purchase price, which are to be purchased on a pro-rata basis from among the tendered notes of that series. It set a proration factor of 62.495% for 10½% discount notes and 79.089% for the 12 7/8% discount notes. Level 3 said it would pay the aggregate purchase price (including accrued interest, if any, through Oct. 24) of $720.6 million for the notes (the dollar-denominated notes accepted for purchase have a total face value of about $1.42 billion and the Euro-denominated notes have a total face value of about €330 million). Payment for the accepted notes will be made to the depositary for the offer on Oct. 25, and all notes not accepted for payment will be promptly returned to their holders. AS PREVIOUSLY ANNOUNCED, Level 3, a Broomfield, Colo.- based long-haul telecommunications operator, said in a Securities and Exchange Commission filing Sept. 10 that it had begun cash tender offers for portions of the nine high yield and convertible debt issues, with a total face value of $1.8 billion, offering to pay a maximum of $814 million (both figures subsequently downsized) via the "modified Dutch auction" procedure to be conducted through its wholly-owned Level 3 Finance LLC subsidiary. It originally slated the expiration for 11:59 p.m. ET on Oct. 5, which was subsequently extended. Level 3 said on Sept. 25 that it was lowering the face value of the debt it will buy back to $1.5 billion from the originally announced $1.8 billion, and would buy the debt back at prices between 22 and 55 cents on the dollar, down from the originally offered prices of between 27 and 57 cents on the dollar, It also said at that time that it would pay a total of $654 million in cash, down from the $814 million it originally intended to spend on the debt buyback. The company further said on Oct. 9 that it had again amended its offers, raising the maximum face value of the issues it would buy to $2.86 billion, and raising the aggregate amount it would pay for the bonds to $1.049 billion, from $1.5 billion and $654 million respectively. It announced a lowering of the "modified Dutch auction" process price range for each category of notes, to from 15 to 48 cents on the dollar. Under the "modified Dutch auction" procedure, Level 3 said it would accept tendered notes in each offer in the order of the lowest to the highest tender prices specified by tendering holders within the applicable price range for the notes, and would select as its purchase price the single lowest price thus specified so as to allow Level 3 to buy the maximum offer amount of notes for that series (or, if less than the offer amount for that series are tendered, all notes of that series which actually have been tendered). Level 3 Finance would pay the same purchase price for all notes of a given series that are tendered at or below the purchase price for that series, upon the terms and subject to the conditions of the applicable offer, including the proration terms for that offer. Tendered notes could have been withdrawn at any time prior to the expiration date of the offer. Level 3 said it planned to pay for the note buy-back using available cash. None of the nine individual offers for each series of notes was conditioned on the consummation of any other offer, and no offer had as a condition that a minimum principal amount of notes or principal amount at maturity, as applicable, be tendered in that offer. The consummation of the tender offer for each series of notes was, however, subject to certain conditions described in the official Offer to Purchase. Salomon Smith Barney and J.P. Morgan acted as dealer managers for the offers, while Mellon Investor Services LLC was both the information agent and the depositary in connection with the tender offers.

INTERNET CAPITAL GROUP, INC. (ICGE) (CCC+) said it had elected to waive a condition of its previously announced tender offer for a portion of its 5½% convertible subordinated notes due 2004. Internet Capital noted that according to the terms of the original offer, it would not be required to accept for purchase or pay for notes validly tendered, and could amend or extend its offer or delay or refrain from accepting for purchase any such notes, and could decide to terminate the offer, if in its own reasonable judgment, any of the conditions to the offer were not satisfied at the time of the expiration of the offer, particularly including the condition that the U.S. "shall not have declared war or a national emergency and the commencement or escalation of armed hostilities directly or indirectly involving the United States shall not have occurred." Internet Capital Group said it was waiving that condition with respect to the past and current armed hostilities involving the U.S. and Afghanistan, but said that it retains the right to invoke this or any other condition should there be, prior to the expiration of the tender offer, an escalation of armed hostilities from current levels or should there be any armed hostilities directly or indirectly involving the U.S. outside of Afghanistan. AS PREVIOUSLY ANNOUNCED, Internet Capital group, a Wayne, N.J.-based Internet e-commerce company, said Sept. 28 that it had begun a "modified dutch auction" cash tender offer for a portion of its approximately $571.429 million of the 5 ½% notes. The company said it would purchase up to $200 million of the notes, or 35% of the outstanding principal amount, at a price to be determined within a range of $200 to $250 per $1,000 principal amount. It said the offer would expire at midnight ET on Oct. 29, subject to possible further extension, and tendered notes may be withdrawn at any time prior to the expiration date. Internet Capital said that the funds required to consummate the Offer will come from its available cash. Under the "modified Dutch auction" procedure, (subject to the terms and conditions of the offer), it will accept tendered notes in the order of the lowest to the highest tender prices specified by tendering holders within the price range, and will select as its purchase price the single lowest price that will enable the company to purchase the offer amount (or, if less than the offer amount, all of the tendered notes). Internet Capital Group will pay the same purchase price for all notes that are tendered at or below the purchase price, upon the terms and subject to the conditions of the offer, including the proration terms. In the event that the amount of notes tendered by the expiration date at or below the purchase price exceeds the amount the company is offering to buy, Internet Capital Group will accept for payment any notes tendered at or below the purchase price on a pro-rata basis. The offer is not conditioned on a minimum principal amount of notes being tendered. Consummation of the offer for the notes is subject to certain conditions described in the official Offer to Purchase. Credit Suisse First Boston Corp. is dealer manager, D.F. King & Co., Inc. is the information agent, and Chase Manhattan Trust Co. N.A. is the depositary in connection with the offer.

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