CenturyLink wraps offers for $800 million of Embarq, CenturyTel notes

By Susanna Moon

Chicago, Oct. 12 - CenturyLink, Inc. and its wholly owned subsidiary Embarq Corp. said they completed the joint tender offer to purchase up to $600 million of notes, as well as CenturyLink's offer to purchase up to $200 million of notes in a second offer.

The offers expired at midnight ET on Oct. 9. They began on Sept. 14.

Investors tendered $471.744 million, or 47.17%, of the Embarq's 6.738% notes due June 1, 2013 and $74.335 million, or 29.73%, of CenturyLink's 5.5% series O senior notes due April 1, 2013.

In addition, holders tendered $182.47 million, or 36.49%, of the CenturyLink's outstanding 7.875% series L senior notes due Aug. 15, 2012 and $132.46 million, or 26.49%, of 8.375% series H senior notes due Oct. 15, 2010. The notes are listed in order of priority acceptance.

CenturyLink said it accepted all of the 7.875% notes tendered and $17.53 million of the 8.375% notes, representing a pro rata factor of 13.234%.

"CenturyLink's strong balance sheet and investment-grade credit ratings enabled us to issue $650 million of unsecured senior notes due in 2019 and 2039 in late September at very attractive rates," Stewart Ewing, executive vice president and chief financial officer, said in a statement.

"The issuance of those notes and the settlement of these tender offers will enable us to reduce the nearly $1.4 billion of 2013 debt maturities to approximately $850 million."

As previously noted, for each $1,000 principal amount, the purchase price is $1,092.50 for the 6.738% notes and $1,052.50 for the 5.5% notes.

In addition, CenturyLink will purchase up to $200 million principal amount of CenturyTel's $500 million of 7.875% senior notes due Aug. 15, 2012, series L, and its $500 million of 8.375% senior notes due Oct. 15, 2010, series H.

These notes are also listed in order of priority acceptance.

For each $1,000 principal amount, the purchase price is $1,117.50 for the 7.875% notes and $1,065.00 for the 8.375% notes.

Each of the purchase prices listed above includes a $30.00 payment for notes tendered by 5 p.m. ET on Sept. 25, the early tender date. The purchase price for notes tendered after that time but before midnight ET on Oct. 9, the expiration date, will receive the specified purchase price minus $30.00.

Holders will receive accrued interest for all notes accepted.

In each offer, if the principal amount of notes tendered exceeds the cap, the notes will be purchased in the order of their priority acceptance levels.

If there are enough funds to purchase only a portion of the notes of a series, the amount of notes purchased in that series will be prorated.

The offers are not subject to the receipt of any minimum amount of notes. They are conditioned on, among other things, the successful completion of the offering by CenturyLink of $600 million of fixed-rate senior notes with 10-year and 30-year maturities.

Bank of America Merrill Lynch, Barclays Capital Inc., J.P. Morgan Securities Inc. and Wells Fargo Securities, LLC are the lead dealer managers for the offers.

Global Bondholder Services Corp. (866 470-3900 or 212 430-3774) is the information agent.

Embarq and CenturyTel merged in July to form CenturyLink, a Monroe, La.-based provider of voice, broadband and video services.

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