Level 3 to issue $300.22 million more 11 7/8% notes in exchange for remaining 9% convertibles

By Angela McDaniels

Tacoma, Wash., Jan. 24 - Level 3 Communications, Inc. agreed to issue $300,217,000 principal amount of its 11 7/8% senior notes due 2019 to an institutional investor in exchange for $294,732,000 principal amount of the company's 9% convertible senior discount notes due 2013, according to a company news release.

Once this exchange is completed, all of the company's 9% convertibles will be retired, and there will be $605,217,000 principal amount of the 11 7/8% notes outstanding.

Level 3 priced $305 million of the 11 7/8% notes (Caa3/CCC/) on Jan. 11 at 98.173 to yield 12¼%. It will use the proceeds to redeem its outstanding 5.25% convertible senior notes due 2011 on Feb. 18 at 100.75 and for general corporate purposes.

The company expects the exchange to be completed by the end of January.

The 11 7/8% notes issued in the exchange will not be registered under the Securities Act.

Level 3 is a Broomfield, Colo.-based provider of fiber-based communications services.

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