Level 3 Exchanging $100 Million in Debt for Stock

Level 3 Communications has announced an agreement to exchange about $100 million in senior debt for 5.45 million shares of common stock.

Longleaf Partners Fund, for which Southeastern Asset Management is acting as investment advisor, has entered the agreement with Level 3. The agreement is subject to customary closing conditions.

In connection with the deal, Level 3 and Southeastern also are amending an existing agreement that will allow Southeastern on behalf of its advisory clients to buy about 4 million more shares of Level 3’s common stock in the open market.

We believe that this transaction is positive for our company, as it represents another step in delevering the companys balance sheet, reduces our cash interest expense by approximately $15 million on an annualized basis, and allows Southeastern Asset Management, on behalf of its advisory clients, to purchase additional shares on the open market,” Level 3 chief financial officer Sunit S. Patel said in a statement.

Shares of Level 3 closed Wednesday at $24.93 on the New York Stock Exchange.

As of Dec. 31, 2011, Level 3 listed $8.385 billion of “Long-Term Debt, less current portion.”

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