By Paul A. Harris
Portland, Ore., July 14 - Bringing a drive-by deal that was doubled in size, Level 3 priced a $600 million add-on to its 8 1/8% senior notes due July 1, 2019 (Caa1/CCC/) at 98.545 to yield 8 3/8% on Thursday, according to an informed source.
The yield printed on top of the yield talk.
Citigroup Global Markets Inc. was the left bookrunner for the issue, which was upsized from $300 million.
Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Morgan Stanley & Co. and Credit Suisse Securities (USA) LLC were the joint bookrunners.
The issuing entity is Level 3 Escrow Inc., which is subject to contingent assumption by Level 3 Financing, Inc.
The Broomfield, Colo.-based provider of fiber-based communications services plans to use the proceeds to redeem outstanding Global Crossing debt in connection with closing of the acquisition of Global Crossing.
The original $600 million issue priced at 99.264 to yield 8¼% on May 25, 2011.
| Issuer: | Level 3 Escrow Inc., subject to contingent assumption by Level 3 Financing, Inc.
|
| Face amount: | $600 million, increased from $300 million
|
| Proceeds: | $591.27 million
|
| Maturity: | July 1, 2019
|
| Security description: | Add-on to 8 1/8% senior notes
|
| Left bookrunner: | Citigroup Global Markets Inc.
|
| Joint bookrunners: | Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Morgan Stanley & Co., Credit Suisse Securities (USA) LLC
|
| Coupon: | 8 1/8%
|
| Price: | 98.545
|
| Yield: | 8 3/8%
|
| Spread: | 599 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: | July 14
|
| Settlement date: | July 28 with accrued interest
|
| Ratings: | Moody's: Caa1
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| Standard & Poor's: CCC
|
| Distribution: | Rule 144A and Regulation S with registration rights
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| Price talk: | 8 3/8% area
|
| Marketing: | Quick to market
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| Original issue: | $600 million issue priced at 99.264 to yield 8¼% on May 25, 2011
|
| Total issue size: | $1.2 billion
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