EXHIBIT 99.1
[Level (3) Communications 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
Arthur Hodges Sandra Curlander
720-888-6184 720-888-2501
Level 3 Communications, Inc. Announces Proposed Private Offering of $200
Million of Convertible Senior Notes
Also Seeking $450 Million Senior Secured Term Loan
BROOMFIELD, Colo., November 12, 2004 - Level 3 Communications, Inc. (Nasdaq:
LVLT) today announced that it plans to offer $200 million aggregate principal
amount of a new series of its Convertible Senior Notes due 2011 (the "Notes") in
a private offering to "qualified institutional buyers" as defined in Rule 144A
under the Securities Act of 1933. The Notes will be convertible into the
company's common stock at a conversion price to be determined. Level 3 intends
to grant the initial purchasers a 30-day option to purchase up to $40 million
aggregate principal amount of additional Notes.
Level 3 intends to use a portion of the net proceeds from the offering of the
Notes, together with borrowings under a $450 million senior secured term loan
that is expected to be entered into by its subsidiary, Level 3 Financing, Inc.,
to fund the purchase of certain debt securities due 2008 pursuant to Level 3's
currently pending debt tender offers.
In addition, Level 3 Communications, Inc. intends to use a portion of the net
proceeds from the offering of the Notes to enter into bond hedge and warrant
transactions with respect to its common stock. The transactions are designed to
enable the company to limit dilution from the conversion of the Notes. The
transactions as currently contemplated would effectively increase the
anticipated conversion premium to approximately 70% to 100%. The cost of the
bond hedge and warrant transactions is estimated to be between approximately 14%
and 19% of the gross proceeds from the offering of the Notes.
The company expects to use remaining net proceeds from the offering of the Notes
to repurchase, repay or refinance existing debt, from time to time, and for
general corporate purposes, including working capital, capital expenditures and
acquisitions.
The Notes will not be registered under the Securities Act of 1933, as amended or
any state securities laws and, unless so registered, may not be offered or sold
except pursuant to an applicable exemption from the registration requirements of
the Securities Act of 1933 and applicable state securities laws.
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 subsidiaries, Software
Spectrum and (i)Structure. For additional information, visit their respective
Web sites at www.softwarespectrum.com and www.i-structure.com.
The Level 3 logo is a registered service mark of Level 3 Communications, Inc. in
the United States and/or other countries.
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: changes in the overall economy relating to,
among other things, the September 11 attacks and subsequent events, substantial
capital requirements; development of effective internal processes and systems;
the ability to attract and retain high quality employees; technology; the number
and size of competitors in its markets; law and regulatory policy; and the mix
of products and services offered in the company's target markets. 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.