Level 3 Raises Money, Reaffirms, and Vyvx Wins ESPN Brazil

July 18th, 2012 by · 3 Comments

Level 3 Communications (NYSE:LVLT, news, filings) said this morning that it plans to sell $300M of senior unsecured notes due 2019 in a private offering to qualified institutional buyers. The money will go to general corporate purposes, most likely debt refinancing - which of course is where most of it usually goes. In conjunction with the sale, Level 3 offered up the following quote

“The company is confirming the relevant information contained in the Business Outlook section of the First Quarter 2012 earnings release dated May 3, 2012.”

So what did they say then? Sequential CNS revenue growth for the rest of the year, and 2012 EBITDA guidance of 20-25% growth over last year's pro forma $1.216B. In other words, Level 3 probably won't be reducing guidance next week - although I suppose they could still narrow the EBITDA guidance range or something. That's welcome news, as analysts lately have been quite skeptical and the market has the company's stock drifting below $20 again ahead.

This quarter's report could be a turning point for Level 3, as it marks the halfway point in the Global Crossing integration and thus it should start getting easier to see what they'll look like next spring when they come out the other side.  And if it doesn't, well then the story doesn't change.

Meanwhile, they continued winning content business in Latin America with a Vyvx win at ESPN Brazil. Level 3 will be providing broadcast solutions and managed services to optimize transmissions and provide integrated services for TV stations in Brazil to carry ESPN content. The company has been moving quickly to take advantage of the Global Crossing assets in South America when it comes to the content vertical.

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3 Comments So Far


  • toddforthree says:

    rob do you know if the vyvx win is replacing something glbc did before? it doesnt read that way in the pr but just curious if when they say “This is Level 3’s first Vyvx infrastructure contract in Brazil.” could it also be translated into “we are using vyvx for the first time in replace of something glbc was doing”

    thanks

    • I don’t know for certain, but I suspect this is an expansion of LVLT’s relationship with ESPN in the US, rather than taking over an existing GLBC relationship. GLBC’s Genesis division had only just expanded to South America itself when the deal was announced.

  • Scott says:

    Gogogo. How is uk doing. Higasi needsto go back!

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