Fitch rates Level 3 senior debt CCC

Fitch Ratings said it assigned an initial rating of CCC to the senior unsecured debt of Level 3 Communications Inc. and Level 3 Financing Inc. Also, Fitch assigned a CC rating to the convertible subordinated obligations of Level 3.

The outlook is stable.

Fitch said its ratings reflect the company's high leverage, which is expected to remain above 10 times through 2005, lack of revenue growth, and expectation for negative free cash flow at least through 2005. While the company has reduced debt to approximately $5 billion in 2004, compared with a level above $6 billion in 2002, EBITDA will decline in 2004 compared with 2003 due to integration costs associated with its ICG and Allegiance dial-up modem transactions.

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