By Paul A. Harris
Portland, Ore., Jan. 11 – Level 3 Financing Inc., a wholly owned subsidiary of Lumen Technologies, priced a $900 million issue of 8.5-year sustainability-linked senior notes (Ba3/BB) at par to yield 3¾% in a Monday drive-by, according to market sources.
The yield printed at the tight end of yield talk in the 3 7/8% area. Initial guidance was in the 4% area.
Lead left bookrunner Morgan Stanley & Co. LLC will bill and deliver. Joint bookrunners were Citigroup Global Markets Inc., BofA Securities Inc., Barclays, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, RBC Capital Markets LLC, Wells Fargo Securities LLC, Fifth Third Securities Inc., Mizuho Securities USA Inc., TD Securities (USA) LLC, Truist Securities Inc., Cantor Fitzgerald & Co., MUFG, RF and Deutsche Bank Securities Inc.
The Denver-based enterprise technology platform services provider plans to use the proceeds, together with cash on hand, to redeem all $900 million of its 5 3/8% senior notes due 2024.
In a Monday press release announcing the notes offer Lumen stated that as part of its environmental, social and governance (ESG) initiatives, it has established science-based targets to reduce its annualized absolute market-based Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 18% and its annualized absolute upstream Scope 3 GHG emissions by 10% by 2025, with 2018 as the baseline year for measurement.
The company said it plans to continue to report its progress toward its goals in its annual ESG reports.
| Issuer: | Level 3 Financing Inc.
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| Amount: | $900 million
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| Maturity: | July 15, 2029
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| Securities: | Sustainability-linked senior notes
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| Lead left bookrunner: | Morgan Stanley & Co. LLC (bill and deliver)
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| Joint bookrunners: | Citigroup Global Markets Inc., BofA Securities Inc., Barclays, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, RBC Capital Markets LLC, Wells Fargo Securities LLC, Fifth Third Securities Inc., Mizuho Securities USA Inc., TD Securities (USA) LLC, Truist Securities Inc., Cantor Fitzgerald & Co., MUFG, RF and Deutsche Bank Securities Inc.
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| Coupon: | 3¾%
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| Price: | Par
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| Yield: | 3¾%
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| Spread: | 278 bps
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| First call: | Jan. 15, 2024 at 101.875
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| Trade date: | Jan. 11
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| Settlement date: | Jan. 13
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| Ratings: | Moody's: Ba3
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| S&P: BB
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 3 7/8% area
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| Marketing: | Drive-by
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