CenturyLink's Embarq gets early tenders for $1.14 billion notes

By Jennifer Chiou

New York, March 16 - CenturyLink, Inc. subsidiary Embarq Corp. announced the receipt of early tenders for about $1.14 billion overall of its $2 billion of 7.082% notes due 2016 and its $528,256,000 of 6.738% notes due 2013.

The early tender date was 5 p.m. ET on March 16.

As reported, the offer is subject to two caps. The company will purchase no more than $1.3 billion of the 7.082% notes, and it will spend no more than $2.05 billion, including premium and accrued interest, to repurchase the two series of notes, which are listed in order of their acceptance priority levels.

When the offer was announced, the cap was $1 billion for the notes due in 2016, and the overall cap was for $1.25 billion of the securities.

For each $1,000 principal amount of notes, Embarq will pay $1,130.61 for the 7.082% notes and $1,072.07 for the 6.738% notes, each including a $30.00 early tender payment for those who tendered by 5 p.m. ET on March 16.

The full purchase price was determined using the present value of future payments discounted to the anticipated settlement date at a discount rate equal to the sum of the yield to maturity for the applicable reference security, based on the bid-side price of that reference security at 2 p.m. ET on March 16, plus a fixed spread minus accrued interest up to but excluding the anticipated settlement date.

The reference security was the 0.875% Treasury due Feb. 28, 2017 for the 7.082% notes and the 0.5% Treasury due May 31, 2013 for the 6.738% notes. The fixed spread was 255 basis points for the 7.082% notes and 25 bps for the 6.378% notes.

The company will pay accrued interest up to but excluding the anticipated settlement date, which is April 2.

The offer will expire at midnight ET on March 30.

Concurrently with the tender offer, CenturyLink already announced that it expects, subject to market conditions, to sell fixed-rate senior notes with 10- and 30-year maturities. The proceeds of the offering, available cash and additional borrowings under CenturyLink's revolving credit facility will be used to fund the tender offer.

The tender offer is conditioned on the successful completion of the debt offering.

The lead dealer managers for the tender offer are Barclays Capital Inc. (800 438-3242 or 212 528-7581) and J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811). The information agent is Global Bondholder Services Corp. (866 736-2200 or 212 430-3774).

The bookrunners for the debt offering are Barclays, JPMorgan, Morgan Stanley & Co. LLC and RBC Capital Markets, LLC.

CenturyLink is a telecommunications company based in Monroe, La. It acquired Embarq in June 2009.

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