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Level Three upsized $2 billion Libor plus 350 bps loan prices at 99¼
By Paul A. Harris
Portland, Ore., Oct. 10 – Level 3 Financing Inc. upsized its senior secured term loan B due 2022 to $2 billion from $1.5 billion and priced the deal with a 350 basis points spread to Libor and a 1% Libor floor at 99¼, according to a trader.
The price came rich to initial discount talk of 98½ to 99.
Upon entering the secondary market, the deal was seen at 99 1/8 bid, 99 5/8 offered.
Bank of America Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc., Barclays, Goldman Sachs Bank USA, Jefferies Finance LLC and J.P. Morgan Securities LLC are the lead banks on the deal.
The loan has 101 soft call protection for six months.
Proceeds will be used to help fund the purchase of tw telecom inc. for $10.00 cash and 0.7 shares of Level 3 common stock for each share of tw telecom common stock that is owned at closing. The stock-and-cash transaction is valued at $40.86 per share, or about $7.3 billion, including the assumption of roughly $1.6 billion of net debt as of March 31.
For the 12 months ended March 31, the combined company had pro forma revenue of $7.9 billion and adjusted EBITDA of $2.2 billion before synergies and $2.4 billion including expected run-rate expense synergies.
Closing is expected in the fourth quarter, subject to regulatory approvals, stockholder approvals at both companies and customary conditions.
Level 3 is a Broomfield, Colo.-based provider of fiber-based communications services. tw telecom is a Littleton, Colo.-based provider of managed data, internet and voice networking solutions to businesses and large organizations.
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