Special Note Regarding Name Change
On September 14, 2020, CenturyLink, Inc. announced the launch of its “Lumen” brand and, effective September 18, 2020, its stock began trading under the ticker symbol “LUMN.” As a result, CenturyLink, Inc. is referred to below as “Lumen Technologies,” “Lumen,” or the “Company.” The Company expects to formally change its name “CenturyLink, Inc.” to “Lumen Technologies, Inc.” upon satisfying all applicable requirements.
| Entry into a Material Definitive Agreement. |
Indenture Related to Issuance of Notes
On November 27, 2020, Lumen:
| | • | | completed its previously-announced private placement of $1.0 billion aggregate principal amount of its 4.500% Senior Notes due 2029 (the “2029 Notes”); and |
| | • | | in connection therewith, entered into an indenture (the “Indenture”) with Regions Bank, as trustee, dated November 27, 2020, which sets forth the terms of the 2029 Notes. |
The net proceeds from the sale of the 2029 Notes were approximately $988 million, after deducting fees and offering expenses. The Company plans to use these net proceeds (i) to redeem all $775 million aggregate principal amount of outstanding 6.125% Notes due 2053 (the “2053 Notes”) issued by its wholly-owned subsidiary, Qwest Corporation, and (ii) for general corporate purposes, including reducing Lumen’s revolving or other indebtedness.
The 2029 Notes were sold pursuant to a purchase agreement, dated November 23, 2020 (the “Purchase Agreement”), between the Company and the initial purchasers of the 2029 Notes (the “Initial Purchasers”) for resale on the terms described further below. The Purchase Agreement includes customary representations, warranties and covenants of the Company, including customary indemnification and contribution obligations.
The 2029 Notes will be the senior unsecured obligations of the Company and will rank senior in right of payment to any of its existing and future subordinated debt and rank equally in right of payment with all of its existing and future unsecured and unsubordinated debt. The 2029 Notes will not be guaranteed by any of the Company’s subsidiaries. The 2029 Notes will mature on January 15, 2029. Interest on the 2029 Notes will be payable on January 15 and July 15 of each year, beginning on July 15, 2021.
The 2029 Notes will be subject to redemption at the option of the Company, in whole or in part, at any time or from time to time:
| | • | | prior to January 15, 2024, at 100% of the principal amount of 2029 Notes so redeemed plus (i) the applicable “make-whole” premium set forth in the Indenture and (ii) accrued and unpaid interest thereon (if any) up to, but not including, the redemption date; and |
| | • | | on and after January 15, 2024, at redemption prices (expressed as a percentage of principal amount) equal to (i) 102.250%, for redemptions between January 15, 2024 and January 14, 2025, (ii) 101.125%, for redemptions between January 15, 2025 and January 14, 2026, and (iii) 100.000%, for redemptions on or after January 15, 2026; plus , in each case, accrued and unpaid interest thereon (if any) up to, but not including, the redemption date. |
In addition, at any time or from time to time on or prior to January 15, 2024, the Company may, at its option and subject to certain conditions, redeem up to 40% of the original aggregate principal amount of the 2029 Notes at a redemption price equal to 104.500% of the principal amount of the 2029 Notes so redeemed,
plus
accrued and unpaid interest thereon (if any) to the redemption date, with the net cash proceeds from one or more sales of equity by the Company that meet the terms and conditions specified in the Indenture.
Upon the occurrence of certain specified change of control events, the Company will be required, unless it has elected to redeem the 2029 Notes as described above, to make an offer to repurchase the 2029 Notes at a price equal to 101% of their aggregate principal amount, together with any accrued and unpaid interest to, but not including, the date of repurchase.
