Exhibit 99.1
[Logo]
1025 Eldorado Boulevard
Broomfield, Colorado 80021
www.Level3.com
NEWS RELEASE
Level 3 contacts:
Media: Josh Howell Investors: Robin Grey
720-888-2517 720-888-2518
Jennifer Daumler Sandra Curlander
720-888-3356 720-888-2501
Level 3 Announces Private Debt Exchange Offer
For $1.23 Billion of Debt Securities
BROOMFIELD, Colo., December 12, 2005 -- Level 3 Communications, Inc. (NASDAQ:
LVLT) announced today that it is commencing private offers to exchange any and
all of its 9 1/8% Senior Notes due 2008, 11% Senior Notes due 2008 and 10 1/2%
Senior Discount Notes due 2008 (together the "old notes") in a private placement
for cash and a maximum of $1,230,272,000 aggregate principal amount of its new
11.50% Senior Notes due 2010 (the "new notes"). The exchange offers are being
made only to qualified institutional buyers and institutional accredited
investors inside the United States and to certain non-U.S. investors located
outside the United States ("eligible holders"). Each exchange offer will expire
at 11:59 p.m., New York City time, on January 10, 2006, unless extended.
Eligible holders who validly tender and do not withdraw their old notes on or
prior to 5:00 p.m., New York City time, on December 22, 2005, unless extended
(the "early participation date"), will also receive an early participation
payment, as set forth below.
The cash and principal amount of new notes to be issued to eligible holders for
each $1,000 principal amount, or principal amount at maturity, as applicable, of
old notes accepted in exchange as well as the cash payment that will be paid to
eligible holders who validly tender their old notes on or prior to the early
participation date is set forth in the table below.
Consideration per $1,000 principal amount
of old notes exchanged
Principal Early
Aggregate Amount of Participation
Principal new notes Cash
Amount to be Cash Payment(1) Total Cash
Title of old notes to be exchanged CUSIP Outstanding Issued Payment Payment(1)
91/8% Senior Notes due 2008 52729NAC4 $954,195,000 $1,000.00 $40.00 $25.00 $65.00
U52782AA4
52729NAA8
11% Senior Notes due 2008 52729NAK6 $132,495,000 $1,000.00 $70.00 $25.00 $95.00
101/2% Senior Discount Notes due 2008(2) 52729NAE0 $143,582,000 $1,000.00 $37.00 $25.00 $62.00
(1) Received only if old notes are tendered on or prior to the early
participation date.
(2) Fully accreted.
The purpose of these private exchange offers is to improve Level 3's financial
flexibility by extending the maturities of its overall indebtedness and reducing
the amount of its outstanding indebtedness with maturities in 2008, the first
year in which its outstanding senior unsecured indebtedness is due.
Tendered old notes may be validly withdrawn at any time prior to 5:00 p.m., New
York City time, on December 22, 2005. Notes tendered after the withdrawal date
for any exchange offer may not be withdrawn unless Level 3 reduces the
consideration being offered, the early participation payment or the aggregate
principal amount of notes being sought in that exchange offer.
Each of the exchange offers is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the exchange
offers at least $645.1 million aggregate principal amount of old notes
(representing approximately 50% of the aggregate principal amount outstanding of
all of Level 3's notes with a 2008 maturity and approximately 52% of the
aggregate principal amount outstanding of the old notes). Certain eligible
holders holding approximately 42% of the aggregate principal amount outstanding
of old notes (representing approximately 40% of the aggregate principal amount
outstanding of all of Level 3's notes with a 2008 maturity) have indicated their
intent to exchange their old notes in the exchange offers, subject to the terms
and conditions of the exchange offers.
The new notes have not been registered under the Securities Act of 1933, as
amended, and may not be offered or sold in the United States absent registration
or an applicable exemption from registration requirements. Level 3 will enter
into a registration rights agreement pursuant to which it will agree to file an
exchange offer registration statement with the Securities and Exchange
Commission with respect to the new notes.
The new notes will be senior unsecured obligations of Level 3, ranking equal in
right of payment with old notes not tendered in the exchange offers. The new
notes will mature on March 1, 2010, and will bear interest at a rate per annum
equal to 11.50%. Interest on the new notes will be payable on March 1 and
September 1 of each year, beginning on September 1, 2006. Level 3 may redeem
some or all of the new notes at any time on or after March 1, 2009, at 100% of
their principal amount plus accrued interest. The other terms of the new notes
will be the same in all material respects as the terms of the 9 1/8% Senior
Notes due 2008 of Level 3, except that the new notes will not be registered
under
the Securities Act or any state securities laws and will therefore be subject to
substantial restrictions on transfer.
This press release shall not constitute an offer to sell or the solicitation of
an offer to buy any security and shall not constitute an offer, solicitation or
sale in any jurisdiction in which such offering, solicitation or sale would be
unlawful.
About Level 3 Communications
Level 3 (Nasdaq:LVLT) is an international communications and information
services company. The company operates one of the largest Internet backbones in
the world, is one of the largest providers of wholesale dial-up service to ISPs
in North America and is the primary provider of Internet connectivity for
millions of broadband subscribers, through its cable and DSL partners. The
company offers a wide range of communications services over its 23,000-mile
broadband fiber optic network including Internet Protocol (IP) services,
broadband transport and infrastructure services, colocation services, and
patented softswitch managed modem and voice services. Its Web address is
www.Level3.com. The company offers information services through its subsidiary,
Software Spectrum. For additional information, visit its Web site at
www.softwarespectrum.com.
The Level 3 logo is a registered service mark of Level 3 Communications, Inc. in
the United States and/or other countries. Level 3 services are provided by a
wholly owned subsidiary of Level 3 Communications, Inc.
Forward-Looking Statement
Some of the statements made by Level 3 in this press release are forward-looking
in nature. Actual results may differ materially from those projected in
forward-looking statements. Level 3 believes that its primary risk factors
include, but are not limited to: developing new products and services that meet
customer demands and generate acceptable margins; increasing the volume of
traffic on Level 3's network; overcoming the softness in the economy given its
disproportionate effect on the telecommunications industry; integrating
strategic acquisitions; attracting and retaining qualified management and other
personnel; successfully completing commercial testing of new technology and
information systems to support new products and services, including voice
transmission services; ability to meet all of the terms and conditions of our
debt obligations; overcoming Software Spectrum's reliance on financial
incentives, volume discounts and marketing funds from software publishers;
reducing downward pressure of Software Spectrum's margins as a result of the use
of volume licensing and maintenance agreements; and reducing rate of price
compression on certain of the Company's existing transport and IP services.
Additional information concerning these and other important factors can be found
within Level 3's filings with the Securities and Exchange Commission. Statements
in this release should be evaluated in light of these important factors.
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