Level 3 Communications (NYSE:LVLT, news, filings) this morning announced that it plans to issue $640M in new senior notes due 2018 to qualified institutional buyers. They will use the money to tender for their 12.25% debt due 2013, of which they have $550M outstanding. There will be some left over, even if they were to get all of the 12.25%’s. It is a while yet before 2013 rolls around, but the company has a large pile of debt due that year and is clearly not going to wait to chip away at it. Early refi action has been their policy for so many years now that this move probably doesn’t surprise anyone. The amount the debt markets are apparently willing to let them refinance, however, is quite large and therefore opens the year on a hopeful note in the credit markets. I am curious what this offering will price at.
Simultaneously, Level 3 reiterated Q4 and full year 2009 guidance with the following quote:
The company is confirming its previously issued expectation of Consolidated Adjusted EBITDA(1) of $900 million to $950 million for the full year 2009. The company also expects to be approximately Free Cash Flow neutral for 2009 in the aggregate. In addition, for the fourth quarter 2009, the company continues to expect improvement in the sequential performance of Core Network Services revenue. Consolidated Adjusted EBITDA is expected to increase in the fourth quarter compared to the company’s results in the third quarter.
Nothing particularly surprising in there, the question that hangs in the balance is what 2010 will look like – we’ll probably have to wait another 4 weeks or more for that information.
More than anyone in the sector, Level 3 needs 2010 to be year of revenue growth. Three rebuilding years in a row is enough, don’t you think? Now, with little remaining legacy revenues, rebuilt provisioning and back-office systems, a lean workforce, and a recovering economy, it’s time to find a way to make it happen.
It does like they’re going to hit the ground running anyway. Check out the intro to this job opening they have listed:
It’s the new year and its time to take your career to the next level. In 2010 Level 3 will be expanding its sales force across the US by over 600 reps. We are looking for the top hunters in each of our major markets to help deliver our message. Specifically we are looking for 2 top sales reps in the Louisville, KY market.
600? That’s some pretty good hiring – but this is not a PR so I’m taking it with a grain of salt for now. Louisville? That means we’re talking about the Business Markets group and the local initiatives, at least in part.
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