BROOMFIELD, Colo., June 8, 2006 ¾ Level 3 Communications, Inc. (Nasdaq: LVLT) today announced that it had priced the offering of an aggregate of 125 million shares of its common stock in an underwritten offering at a price to the public of $4.55 per share. The company also granted to the underwriters an option, which is exercisable for a 30-day period, to purchase an additional 18.75 million shares of common stock solely to cover over-allotments. The common stock offering is being made by a group of underwriters led by Merrill Lynch, Pierce, Fenner & Smith Incorporated acting as sole book-running manager, Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. Incorporated as joint lead managers and Bear, Stearns & Co. Inc., J.P. Morgan Securities Inc. and UBS Investment Bank as co-managers.
The company also announced that it had priced an offering of $300 million aggregate principal amount of its 3.5% Convertible Senior Notes due 2012 in an underwritten offering at a price to the public of 100% of the principal amount of the notes. The company also granted to the underwriters an option, which is exercisable for a 30-day period, to purchase up to an additional $45 million aggregate principal amount of Convertible Senior Notes due 2012 solely to cover over-allotments. The notes are convertible at any time at the option of the holder into shares of common stock of Level 3 at an initial conversion price of $5.46 per share, subject to adjustment in certain circumstances. The Convertible Senior Notes offering is being made by a group of underwriters led by Merrill Lynch, Pierce, Fenner & Smith Incorporated acting as sole book-running manager, Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. Incorporated as joint lead managers and Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., as co-managers.
The company expects that each of the offerings will be completed on June 13, 2006, subject to customary closing conditions.
A registration statement relating to the common stock and the Convertible Senior Notes has been declared effective by the Securities and Exchange Commission. Offers and sales of the common stock and the Convertible Senior Notes may be made only by the related prospectus and prospectus supplement, which may be obtained from Merrill Lynch & Co., Prospectus Department, 4 World Financial Center, New York, NY 10080, telephone: 212-449-1000.
Level 3 currently intends to use a substantial portion of the net proceeds from these offerings to redeem or repurchase selected debt securities maturing in 2008. The remaining net proceeds will be used to potentially repurchase, repay or refinance other existing indebtedness from time to time, for acquisitions, to enhance liquidity and for general corporate purposes, including working capital and capital expenditures. The outstanding debt securities that the company expects to redeem or repurchase all or a portion of using the net proceeds from these offerings are its 9⅛% Senior Notes due 2008 and 10½% Senior Discount Notes due 2008. Pending the uses described above, the net proceeds of these offerings will be invested in short-term, investment-grade, interest-bearing securities.
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.
