SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 25, 2001
Level 3 Communications, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 47-0210602
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1025 Eldorado Blvd., Broomfield, Colorado 80021
(Address of principal executive offices) (Zip code)
720-888-1000
(Registrant's telephone number including area code)
Not applicable
(Former name and former address, if changed since last report)
Item 5. Other Events
On September 25, 2001, Level 3 Communications, Inc. ("Level 3")
announced that Level 3 Finance, LLC ("Level 3 Finance"), its first tier, wholly
owned subsidiary, had amended certain terms of the "Modified Dutch Auction"
tender offers for a portion of Level 3's debt and convertible debt securities,
which were commenced on September 10, 2001. Level 3 Finance has amended its
tender offers to provide that it is now offering to purchase these debt and
convertible debt securities for cash, at prices determined by a "Modified Dutch
Auction" procedure as set forth in the press release described below. Level 3
Finance has extended the expiration date of the tender offer for each series of
notes until 11:59 p.m., New York City time, on October 9, 2001, unless that
offer is further extended.
On September 25, 2001, Level 3 issued a press release relating to the
amendment of the tender offers. This press release, which summarizes the
terms and conditions of each tender offer, is filed as Exhibit 99.1 to this
Current Report and incorporated by reference as if set forth in full.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of business acquired
None
(b) Pro forma financial information
None
(c) Exhibits
99.1 September 25, 2001 Press Release relating to the tender offers.
Item 9. Regulation FD Disclosure
On September 25, 2001, Level 3 Communications, Inc. ("Level 3") posted to
its web site at www.Level3.com the following Questions and Answers relating to
the tender offers commenced by Level 3 Finance, LLC. The furnishing of this
information shall not be deemed an admission as to the materiality of the
information included in this Current Report. This information is not filed but
is furnished pursuant to Regulation FD.
Q: What action did Level 3 Communications announce on September 10, 2001?
A: Level 3 Communications announced, in accordance with applicable
securities regulations, that its subsidiary, Level 3 Finance, LLC, is
offering to purchase a portion of Level 3 Communications' outstanding
senior notes and convertible subordinated notes utilizing a "modified
Dutch auction" process.
Q: What is Level 3 Finance, LLC?
A: Level 3 Finance, LLC is a wholly owned subsidiary of Level 3
Communications, Inc. that has offered to purchase a portion of Level 3
Communications' outstanding senior notes and convertible subordinated
notes utilizing a "modified Dutch auction" process.
Q: How does a "modified Dutch auction" process work?
A: During the tender period, which started on Monday, September 10, 2001,
and is expected to end on Tuesday, October 9, 2001, noteholders have
the ability to offer to sell to Level 3 Finance all or a portion of
their notes within the price range specified by Level 3 Finance. At
the expiration of the tender offers, Level 3 Finance will accept
tenders as follows:
1) Level 3 Finance will accept tenders of notes starting at the
lowest prices within a specified pricing range for each series of
notes and will continue to accept tenders in order of increasing
offer price until Level 3 Finance has purchased up to the
specified maximum face value amount per series of notes.
2) Level 3 Finance will then pay to all noteholders whose tenders
are accepted the highest price specified for a series of notes
that is accepted for purchase by Level 3 Finance (the "Purchase
Price") even if that price is higher than the price indicated by
the noteholder.
3) If the aggregate principal amount of notes other than the 2009
Convertible Notes and 2010 Convertible Notes tendered at the
highest Purchase Price exceeds the maximum face value amount of
notes that is specified by Level 3 Finance at the Purchase Price,
all securities tendered at prices below the applicable Purchase
Price will be accepted, and acceptances of tenders at the
Purchase Price will be allocated among tendering noteholders of
the series of notes on a pro rata basis according to the
principal amount tendered.
If the aggregate principal amount of 2009 Convertible Notes and
2010 Convertible Notes tendered at the highest Purchase Price
exceeds the maximum face value amount of notes that is specified
by Level 3 Finance at the Purchase Price, Level 3 Finance will
accept all securities tendered at or below the applicable
Purchase Price on a pro rata basis from among such tendered 2009
Convertible Notes and 2010 Convertible Notes as the case may be.
Q: How much cash will Level 3 Finance spend in the tender offers?
A: Level 3 Finance will spend anywhere between $0 and approximately $654
million in cash, excluding accrued interest. The actual amount spent
will depend on the amount of notes Level 3 Finance agrees to purchase
in the tender offers. Level 3 Finance has the option to revise the
tender offers, which may increase or decrease the range of possible
amounts expended. Since the completion of the tender offers is subject
to the satisfaction of certain customary conditions, Level 3 Finance
will be obligated to spend this cash only if those conditions are
satisfied.
Q: Is there a minimum amount of debt Level 3 Finance is obligated to
purchase regardless of price?
A: No. If there are no offers within the pricing ranges specified, Level
3 Finance is not obligated to purchase any notes.
Q: In order for Level 3 Finance to complete one tender offer for a
particular series of notes, does any other tender offer have to be
completed as well?
A: No, each series of notes is treated separately and therefore is not
dependent on the successful tender of any other series.
Q: Why is Level 3 Finance offering to purchase Level 3 Communications'
outstanding senior notes and convertible subordinated notes?
A: Given the current trading levels of the debt securities, which
represent significant discounts to face value, Level 3 Communications
believes purchasing debt securities at prices specified in the tender
offer is a prudent use of cash.
Q: What is the maximum amount of debt Level 3 Finance is offering to
purchase?
A: Assuming a sufficient amount of notes are offered within the price
range specified in the Offer to Purchase document, Level 3 Finance
will purchase up to an aggregate of $1.5 billion face amount of debt
at maturity.
Q: If Level 3 Finance purchases debt in accordance with the terms of the
tender offers, is Level 3 Communications' business plan fully funded?
A: Level 3 Communications believes that, given the expected cash flow
effects of its previously disclosed initiatives and the proposed
tender offers announced by Level 3 Finance, Level 3 Communications'
business plan remains prefunded to free cash flow breakeven.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Level 3 Communications, Inc.
September 25, 2001 By: /s/ Neil J. Eckstein
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Date Neil J. Eckstein, Vice President