Level 3's $150 million 6-year convertibles to price Wednesday, talked at 3.25%-3.75%, up 17.5%-22.5%

By Kenneth Lim

Boston, June 6 - Level 3 Communications Inc. plans to price its proposed $150 million offering of six-year convertible senior notes on Wednesday after the market closes, market sources said.

The deal, which was announced May 30, is talked at a coupon of 3.25% to 3.75% and an initial conversion premium of 17.5% to 22.5%.

There is a greenshoe option for a further $22.5 million.

Level 3 will concurrently offer 125 million shares in an off-the-shelf sale, with an over-allotment option of a further 18.75 million shares.

Merrill Lynch & Co. is the bookrunner of the registered convertible and stock deals.

The convertibles will be non-callable for the first four years, market sources said.

Level 3 plans to use the net proceeds to redeem or repurchase is 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 debts.

Level 3 is a Broomfield, Colo.-based internet backbone services provider.

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