Level 3 expected to price $1.2 billion two-part senior notes Tuesday

By Paul A. Harris

Portland, Ore., April 14 – Level 3 Financing, Inc. expects to price $1.2 billion of senior notes (existing ratings B3/B/BB) in two tranches Tuesday, according to a syndicate source.

The deal features eight-year notes, which are callable after three years at par plus 50% of the coupon, and 10-year notes, which are callable after five years at par plus 50% of the coupon.

Citigroup Global Markets Inc. is the left bookrunner for the Rule 144A and Regulation S with registration rights offering. BofA Merrill Lynch, Morgan Stanley & Co. LLC, Barclays, Goldman Sachs & Co., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are the joint bookrunners.

The notes in both tranches feature three-year 40% equity clawbacks at par plus the coupon and 101% poison puts.

The Broomfield, Colo.-based fiber-based communications services provider plans to use the proceeds to repay or retire all $1.2 billion of its outstanding 8 1/8% senior notes due 2019.

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