Lumen unit starts exchange offer for up to $1.1 billion of secured notes

By Mary-Katherine Stinson

Lexington, Ky., March 16 – Lumen Technologies, Inc. announced that its indirect wholly owned subsidiary Level 3 Financing, Inc. launched an exchange offer for eight series of notes, according to a press release.

The offer is specifically to exchange senior unsecured notes issued by Lumen for up to $1.1 billion of new 10½% senior secured notes due 2030 issued by Level 3.

Listed in priority acceptance order, the company is offering to exchange the following:

• $206.03 million outstanding 5 5/8% senior notes, series X, due 2025 (Cusip: 156700AZ9) for an early exchange consideration of $920 per each $1,000 principal of Lumen notes or $870 per each $1,000 principal of Lumen notes after the early deadline;

• $65,801,000 outstanding 7.2% senior notes, series D, due 2025 (Cusip: 156686AJ6) for an early exchange consideration of $920 per each $1,000 principal of Lumen notes or $870 per each $1,000 principal of Lumen notes after the early deadline;

• $702,956,000 outstanding 5 1/8% senior notes due 2026 (Cusips: 156700BB1, U1566PAB1) for an early exchange consideration of $710 per each $1,000 principal of Lumen notes or $660 per each $1,000 principal of Lumen notes after the early deadline;

• $294,929,000 outstanding 6 7/8% debentures, series G, due 2028 (Cusip: 156686AM9) for an early exchange consideration of $680 per each $1,000 principal of Lumen notes or $630 per each $1,000 principal of Lumen notes after the early deadline;

• $506,394,000 outstanding 5 3/8% senior notes due 2029 (Cusip: 550241AA1, U54985AA1) for an early exchange consideration of $550 per each $1,000 principal of Lumen notes or $500 per each $1,000 principal of Lumen notes after the early deadline;

• $967,338,000 outstanding 4½% senior notes due 2029 (Cusips: 156700BD7, U1566PAD7) for an early exchange consideration of $550 per each $1,000 principal of Lumen notes or $500 per each $1,000 principal of Lumen notes after the early deadline;

• $518 million outstanding 7.6% senior notes, series P, due 2039 (Cusip: 156700AM8) for an early exchange consideration of $525 per each $1,000 principal of Lumen notes or $475 per each $1,000 principal of Lumen notes after the early deadline; and

• $435,268,000 outstanding 7.65% senior notes, series U, due 2042 (Cusip: 156700AT3) for an early exchange consideration of $525 per each $1,000 principal of Lumen notes or $475 per each $1,000 principal of Lumen notes after the early deadline.

Accrued interest will also be paid.

The final four series of notes are subject to a new note series cap. The issuer will not issue more than $400 million of new notes in exchange for tendered 5 3/8% senior notes due 2029 and 4½% senior notes due 2029 or more than $250 million of new notes in exchange for tendered series P and series U notes.

All Lumen notes tendered at or before the early deadline will have priority over notes tendered after that date, even if that series has a higher acceptance priority.

The early exchange deadline is 5 p.m. ET on March 29 which is also the withdrawal deadline.

The exchange offers expire at 5 p.m. ET on April 13.

Early settlement is expected for March 31. The final settlement date will occur promptly after expiration, expected to be April 17.

The exchange offers are not conditioned upon any minimum amount of Lumen notes being tendered. Each offer is being made independently and is not conditioned upon the completion of any of the other exchange offers.

The offers are conditioned on the satisfaction or waiver of certain customary conditions.

The new notes will mature May 15, 2030 and will pay interest at a rate of 10.5% annually.

They will be fully and unconditionally guaranteed on an unsubordinated and secured basis by the issuer's parent company, Level 3 Parent, LLC, and various subsidiaries, but not by Lumen or members of Lumen's credit group.

The new notes will contain restrictive covenants and events of default that are substantially similar to those of the issuer's outstanding secured notes.

To participate in the offers eligible holders must properly complete and submit the eligibility certification and, in the case of Canadian residents, the Canadian certification form. Holders who desire to obtain and complete an eligibility letter should either visit the website for this purpose at https://www.gbsc-usa.com/eligibility/lumen or call Global Bondholder Services Corp. the exchange and information agent for the exchange offers (855 654-2014 or 212 430-3774).

Lumen is a Denver-based telecommunications company.

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