Broomfield, Colorado – (The Hosting News) – January 22, 2007 – Colocation, VoIP, and Internet backbone company, Level 3 Communications, along with Southeastern Asset Management, on behalf of certain investment accounts, and Legg Mason Opportunity Trust, have entered into an equity exchange agreement.
Under the terms of the agreement, Level 3 has committed to exchange $490 million aggregate principal amount of Level 3’s 10% Convertible Senior Notes due 2011 for a total of approximately 160.1 million shares of Level 3’s common stock, equivalent to approximately 326.78 shares per $1,000 note, and the payment of accrued and unpaid interest on the notes to the closing date. The shares of common stock to be issued under this agreement are exempt from registration pursuant to Section 3(a)(9) under the Securities Act of 1933, as amended. The notes are currently convertible into shares of Level 3’s common stock at a rate of 277.77 shares per $1,000 note. As a result of the exchange, the company expects to reduce its 2007 cash interest expense by approximately $47 million. The notes are callable by the company on May 1, 2009.
Sunit S. Patel, CFO of Level 3 commented, ”This transaction is positive for our company as it helps us delever and reduce interest expense. Throughout 2007, we expect to continue taking steps operationally and financially to improve our financial position.”
Level 3 Communications, Inc., an international communications company, operates one of the largest Internet backbones in the world. Through its customers, Level 3 is the primary provider of Internet connectivity for millions of broadband subscribers. The company provides a comprehensive suite of services over its broadband fiber optic network including Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice services and voice over IP services. The services are designed to provide building blocks that enable Level 3’s customers to meet growing demands for advanced communications solutions.The principal components offered by Level 3’s (3)VoIP Enhanced Local service include network trunking, local telephone numbers, local number portability, the safety of E-911, operator assistance, caller ID, directory listings, and directory assistance. The service is designed to allow Level 3 customers to retain the flexibility to manage and control end-user features without the difficulties of implementing complex interconnection arrangements.
For more information about Level 3, please visit: www.level3.com.