New Issue: Level 3 sells upsized $600 million 8 1/8% eight-year notes at 99.264 to yield 8¼%

By Paul A. Harris

Portland, Ore., May 25 - Level 3 Escrow Inc. priced an upsized $600 million issue of 8 1/8% eight-year senior notes (Caa1/CCC/) at 99.264 to yield 8¼% on Wednesday, according to an informed source.

The yield printed on top of price talk.

Citigroup Global Markets Inc. was the left bookrunner for the quick-to-market issue, which was upsized from $500 million.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Morgan Stanley & Co. Inc. and Credit Suisse Securities (USA) LLC were the joint bookrunners.

Proceeds will be used to reduce the outstanding bridge loan in connection with the acquisition of Global Crossing and for the refinancing of certain Global Crossing debt.

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

Issuer:	Level 3 Escrow Inc. (subject to contingent assumption by Level 3 Financing, Inc.)
Amount:	$600 million, increased from $500 million
Maturity:	July 1, 2019
Securities:	Senior notes
Left bookrunner:	Citigroup Global Markets Inc.
Joint bookrunners:	Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Morgan Stanley & Co. Inc., Credit Suisse Securities (USA) LLC
Coupon:	8 1/8%
Price:	99.264
Yield:	8¼%
Spread:	512 bps
Call features:	Make-whole call at Treasuries plus 50 bps until July 1, 2015, then callable at 104.063, 102.031, par on and after July 1, 2017
Equity clawback:	35% at 108.125 until July 1, 2014
Change-of-control put:	101%
Trade date:	May 25
Settlement date:	June 9
Ratings:	Moody's: Caa1
	Standard & Poor's: CCC
Distribution:	Rule 144A and Regulation S with registration rights
Price talk:	8¼% area
Marketing:	Quick to market

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