S&P assigns B to Level 3 notes

Standard & Poor's said it assigned its B issue-level rating and 6 recovery rating to Level 3 Communications Inc.'s proposed $1.2 billion aggregate senior unsecured notes due 2023 and 2025.

The 6 recovery rating reflects an expectation for negligible (0%-10%) recovery in the event of a payment default.

The company's wholly owned subsidiary, Level 3 Financing Inc., will issue the notes.

Proceeds will be used to redeem the company's $1.2 billion 8 1/8% senior notes due 2019.

The BB- corporate credit rating and stable outlook remain unchanged.

The proposed transaction will not have an impact on key credit measures, including adjusted leverage, which we expect to be in the low- to mid-4 times area in 2015, modestly down from 4.5 times in 2014, and funds from operations to debt will be in the 15%-17% range, up from 13% in 2014. S&P expects free operating cash flow will improve as a result of the transaction because of lower interest expense.

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