By Kenneth Lim
Boston, June 8 - Level 3 Communications Inc. on Wednesday doubled its offering of six-year convertible senior notes to $300 million and priced it within talk, at a coupon of 3.5% and an initial conversion premium of 20%.
The notes were offered at par. Price talk was for a coupon of 3.25% to 3.75% and an initial conversion premium of 17.5% to 22.5%. The size of the deal was originally $150 million plus an over-allotment option of $22.5 million.
The greenshoe is now $45 million.
Level 3 concurrently sold 125 million shares at $4.55 apiece, or $568.75 million in total, in an off-the-shelf offering. The share issue has an over-allotment option of a further 18.75 million shares.
Merrill Lynch was the bookrunner of the registered convertible and stock deals.
The convertibles have an initial conversion price of $5.46 per share, or an initial conversion ratio of 183.1502. Level 3 stock closed at $4.55 on Wednesday before the deal was priced.
The convertibles are non-callable for the first four years. There are no puts.
The convertibles have standard dividend and takeover protection.
Level 3 plans to use the net proceeds to redeem or repurchase its 9.125% senior notes due 2008 and 10.5% senior discount notes due 2008. The remaining proceeds will be used to buy back, pay out or refinance other existing debt.
Level 3 is a Broomfield, Colo.-based internet backbone services provider.
| Issuer: | Level 3 Communications Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Merrill Lynch & Co.
|
| Amount: | $300 million
|
| Greenshoe: | $45 million
|
| Maturity: | June 15, 2012
|
| Coupon: | 3.5%
|
| Price: | Par
|
| Yield: | 3.5%
|
| Conversion premium: | 20%
|
| Conversion price: | $5.46
|
| Conversion ratio: | 183.1502
|
| Dividend protection: | Yes
|
| Takeover protection: | Change-of-control put with premium make-whole
|
| Call protection: | Non-callable four years
|
| Puts: | None
|
| Price talk: | 3.25%-3.75%, up 17.5%-22.5%
|
| Pricing date: | June 7 after the close
|
| Settlement date: | June 13
|
| Distribution: | Registered
|
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