CenturyLink readies launch of $4.5 billion term loan B for Thursday

By Sara Rosenberg

New York, May 10 – CenturyLink Inc. set a lender call for 10 a.m. ET on Thursday to launch its proposed $4.5 billion covenant-light term loan B due January 2025, according to a market source.

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., Barclays, Goldman Sachs Bank USA, J.P. Morgan Securities LLC, RBC Capital Markets, MUFG, Wells Fargo Securities LLC, Mizuho Bank and SunTrust Robinson Humphrey Inc. are the leads on the deal.

Based on filings with the Securities and Exchange Commission, the company is also expected to get a $2 billion revolver and a $1.5 billion term loan A.

Proceeds will be used to help fund the acquisition of Level 3 Communications Inc. for $26.50 per share in cash and a fixed exchange ratio of 1.4286 shares of CenturyLink stock for each Level 3 share they own, which implies a purchase price of $66.50 per Level 3 share. The transaction is valued at about $34 billion, including the assumption of debt.

Along with the senior secured credit facilities commitment, the company received a commitment for a $2,225,000,000 senior secured bridge loan that is expected to be replaced with the issuance of senior secured notes or other debt securities.

Other funds for the transaction are anticipated to come from cash on hand.

At closing, CenturyLink shareholders will own around 51% and Level 3 shareholders will own about 49% of the combined company.

The combined company is expected to have pro forma net leverage of less than 3.7 times at close, including run-rate synergies.

Closing is expected by the end of the third quarter, subject to regulatory approvals, approval of CenturyLink and Level 3 shareholders and other customary conditions.

CenturyLink is a Monroe, La.-based communications, hosting, cloud and IT services company. Level 3 is a Broomfield, Colo.-based provider of communications services to enterprise, government and carrier customers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.