Level 3 Communications on Tuesday announced an agreement to sell $305 million in senior notes to qualified institutional investors.
The company said it will use a portion of the proceeds to pay back about $196 million in debt that is due at the end of the year.
In a press release, the company revealed it would use the remaining proceeds to support general corporate purposes, including working capital, capital expenditures and potential repurchases, redemptions or refinancing of the Companys and its subsidiaries indebtedness from time to time.”
Level 3 expects the offering to be completed on January 19.
The company confirmed it will carry long-term debt of approximately $6.6 billion following the transaction. Level 3 had a cash balance of $544 million as of Sept. 30, 2010.
Shares of Level 3 (LVLT) closed Wednesday at $1.27 on the NASDAQ, up 7 percent.
In the third quarter, Level 3 posted consolidated revenues of $912 million and a net loss of $163 million.
It is clear that the viability of Level 3’s capital structure depends on top-line growth and margin expansion,” Moodys Investors Service stated in a note Tuesday rating Level 3s new debt. In the context of relatively low general economic growth and with significant competition, it is not clear we can expect more than moderate cash flow growth for the next year or two.”
On Wednesday, Feb. 2, Level 3 will issue its fourth-quarter earnings and financial results for the 2010 fiscal year.
Level 3 sells communications services to cable companies, domestic carriers, wireless providers, large enterprises and other businesses.
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February 15 2019 @ 14:45:26 UTC