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Level 3 Communications readies $1.4B loan refinancing deal

Bank of America Merrill Lynch, Citi, Morgan Stanley, Credit Suisse, Deutsche Bank, and J.P. Morgan are launching a refinancing of Level 3 Communications’ loans that mature in 2014, sources said.

A call is set for 10:30 a.m. EDT.

The deal, which replaces $1.4 billion of existing loans, will include a 3.5-year term loan of at least $300 million, along with a seven-year B term loan of up to $1.1 billion. The issuer, an international provider of fiber-based communication services, will also use cash on hand as part of the refinancing.

Both tranches will include a 101 soft call premium through Aug. 1, 2013. Price talk hasn’t emerged yet.

Level 3 is rated B-/B3, with the loans at B+/Ba3.

Commitments will be due on Thursday, Aug. 2, with closing expected during the week of Aug. 6

Level 3 ago tapped the bond market two weeks via Citi, Bank of America, Morgan Stanley, Credit Suisse, Deutsche Bank, and J.P. Morgan for $300 million of senior notes. The issue priced at par to yield 8.875%. Proceeds were earmarked for general corporate purposes, including the potential repurchase, redemption, repayment, or refinancing of the existing debt of the company and its subsidiaries, according to the firm.

Investors had expected Level 3 to approach the markets following release of its second-quarter results last week. The issuer reported total revenue of $1.586 billion for the second quarter of 2012, in line with $1.586 billion for the first quarter 2012. Consolidated adjusted EBITDA rose to $353 million, from $327 million in the first quarter 2012. – Staff reports

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