Fitch Rates Level 3 Financing's 144A Senior Notes 'B'.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has assigned a rating of 'B' to Level 3 Financing, Inc.'s proposed 144A issuance of $500 million of 9.25% senior notes due 2014 as well as a recovery rating of 'RR1'. Fitch has an Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) of 'CCC' for Level 3 Communications
Level 3 Communications NASDAQ: LVLT is a communications and information services company headquartered in Broomfield, Colorado, USA. , Inc. (Level 3) and Level 3 Financing, Inc. The Rating Outlook is Positive. Level 3 has also initiated a tender offer for Level 3 Financing's 10.75% senior notes due 2011, which has $500 million outstanding. Notes tendered by Dec. 27, 2006 will receive consideration of $1,092.21 per $1,000 principal amount. Notes tendered after Dec. 27 will receive consideration of $1,062.21 per $1,000 principal amount. The tender expiration date Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. is Jan. 11, 2007. Fitch estimates the cost of the tender, if successfully tendered in full early, would approximate $546 million. The new issuance of $500 million of 9.25% notes will be used in part to fund the tender offer. Fitch believes the tender and new issuance reflect the Positive Outlook assigned to the company as, if successful, it will begin to smooth the maturity schedule by reducing the outstanding 2011 maturities to approximately $2.1 billion. In addition, the company will also experience a modest interest expense savings and consent to eliminate certain restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. associated with that indenture. The Positive Rating Outlook continues to reflect Fitch's belief that the company's acquisitions, including the recently announced Broadwing Corporation Broadwing Corporation is a data, voice, and media solutions company based in Austin, Texas, USA. Enabled by its 20,000-mile All-Optical-Network and 20 nation-wide HDTV transmitting and delivering centers, Broadwing Communications provides communications solutions and (Broadwing) acquisition, gives Level 3 a firm path, if successfully integrated, toward de-leveraging its credit profile and achieving positive free cash flow in 2008. The timing of an upgrade of Level 3's IDR is linked to the company's ability to improve free cash flow, materially reduce leverage, generate positive organic revenue growth and improve margins. Additionally, the company will need to maintain liquidity and financial flexibility. Fitch's Recovery Ratings (RR), introduced in 2005, are a relative indicator of creditor recovery on a given obligation in the event of a default. A broad overview of Fitch's RR methodology as it relates to specific sectors, including a Case Study webcast, can be found at www.fitchratings.com/recovery. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion