LEVEL 3 COMMUNICATIONS CLOSES SENIOR DISCOUNT NOTE OFFERING
Company Raises $500 Million of Gross Proceeds
OMAHA, NEBRASKA, December 2, 1998 – Level 3 Communications, Inc. (Nasdaq: LVLT) today announced that it has sold $833,815,000 aggregate principal amount of 10% Senior Discount Notes Due 2008 in a transaction that is exempt from registration under the Securities Act of 1933, as amended. The issue price of the Senior Discount Notes was $599.66 per $1,000 principal amount at maturity, which represents a yield to maturity of 10%, calculated from December 2, 1998. The Senior Discount Notes will mature on December 1, 2008 and are senior, unsecured obligations of Level 3, ranking pari passu with all existing and future senior unsecured indebtedness of Level 3.
Cash interest will not accrue on the Senior Discount Notes prior to December 1, 2003, unless Level 3 elects to commence the accrual on or after December 1, 2001. The net proceeds to Level 3 in the offering were approximately $486 million, after deducting anticipated offering expenses. Level 3 currently intends to use the net proceeds of the offering to accelerate the implementation of its business plan, including funding for (a) an increase in committed (that is, prefunded) number of route miles of Level 3's U.S. intercity network from 9,000 to approximately 16,000, (b) an expansion of the fiber loops, number of buildings connected and collocation space in the company's U.S. cities, (c) an expansion of the fiber loops, number of buildings connected and collocation space in the company's European cities, (d) purchases of undersea cable capacity and (e) general corporate purposes, including acquisitions.
The securities offered by Level 3 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 such Act's registration requirements.
About Level 3 Communications
Level 3 Communications, Inc. (NASDAQ: LVLT), an international communications company, operates one of the largest Internet backbones in the world, connecting 180 markets in 18 countries. The company serves a broad range of wholesale, enterprise and content customers with a comprehensive suite of services including: Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice and voice over IP services, content delivery and media distribution services. These services provide the building blocks to enable Level 3’s customers to meet their growing demands for advanced communications solutions. The company’s Web address is www.Level3.com.
"Level 3 Communications,” "Level 3," the red 3D brackets and the Level 3 Communications logo are registered service marks of Level 3 Communications, LLC in the United States and/or other countries. Level 3 services are provided by wholly owned subsidiaries of Level 3 Communications, Inc. Any other service, product or company names recited herein may be trademarks or service marks of their respective owners.
Forward-Looking Statement
Some of the statements that we make in this press release are forward looking in nature. These statements are based on management’s current expectations or beliefs. These forward looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside our control, which could cause actual events to differ materially from those expressed or implied by the statements. The most important factors that could prevent us from achieving our stated goals include, but are not limited to our ability to: successfully integrate acquisitions; increase the volume of traffic on our network; defend our intellectual property and proprietary rights; develop new products and services that meet customer demands and generate acceptable margins; successfully complete commercial testing of new technology and information systems to support new products and services; attract and retain qualified management and other personnel; and meet all of the terms and conditions of our debt obligations. 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 press release should be evaluated in light of these important factors. Level 3 is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
