Level 3 Refinances, Advances on 3 Fronts

August 1st, 2012 by · 9 Comments

Perhaps stung by the market’s reaction to last week’s earnings, Level 3 Communications (NYSE:LVLT, news, filings) has gone on offense this week on multiple fronts – the most interesting one not yet appearing in a press release (oh wait, there it is now).

According to reports, the company is in the process of raising $1.4B in order to push out the part of its term loans that come due in 2014, with $1.1B of the new funds due in 2019 and perhaps $300M due in 2015 or 2016. This should surprise no one, as they always move early on such debt overhangs and the debt markets remain happy with their progress on the integration. What this does, assuming it closes of course, is to clear up the next roadblock in the distance, giving them clear sailing for a while as they finish up the Global Crossing integration and keep looking for ways to boost organic growth a few notches. And just this morning, Level 3 has announced its intention to raise another $400M in senior notes due in 2020 to help refinance its 8.75% notes due 2017, of which $700M are outstanding.  Evidently they feel there is a favorable window in the debt markets.

Over in the UK, Level 3 got a bit of good news for once on the UK government front. They have been named as a PSN Framework supplier for five service categories: communication, conferencing, contact centre, gateway, and unified. While it doesn’t mean immediate revenues, like with Networx in the US it helps put them in position to grow this segment again over the next few years.

In Latin America where solid growth was offset by currency weakness during Q2, Level 3 picked up another important content deal — this time in Mexico. TV Azteca will be using their Vyvx broadcast and managed services to bring international sporting events to its Azteca 7 and Azteca 13 networks. This will be the first time they’ll have such broadcasts coming in 100% over fiber rather than satellite, as Vyvx takes full advantage of the former Global Crossing’s fiber assets in and around Mexico.

And back on their home turf, Level 3 extended their voice services off their fiber footprint and into the last two states they hadn’t entered: Alaska and Hawaii. The expanded coverage area will be available for their local inbound and enhanced local services. Customer demand for services in those areas drove the expansion, allowing the consolidation of services under a single carrier.

While the stock markets didn’t much like the company’s earnings last week, the stock price has already started to climb back towards where it was. There wasn’t that far down it could go with overall fiber sector valuations being what they are. Should be interesting to see other competitive fiber operators report next week.

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Categories: Content Distribution · Financials · VoIP

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9 Comments So Far

  • ABC says:

    Keep kicking that can. Maybe one of these decades they will actually PAY OFF some debt. In other news…the stock is down almost $2 in early trading. Nice Offensive moves I must say…

  • CarlK says:

    Wrong Street is up to their CRIMINAL TRICKS again including involving Berkshire Hathaway this morning!

    I hope they BUST those TRADES and put those SHORTS back to square one whilst YELPING about “trading errors!”

    I guess they didn’t care for Berkshire “refinancing” that $400mm additional tranche because:

    1) Money is never a problem for Level 3

    2) It’s going to be us who leads the globe to peace, prosperity and massive productivity gains via the INTERNET PIPES and world’s BANDWIDTH that we control

    If it were up to me, I’d bring Bush Jr. back to The Presidency and “smoke out” every criminal Wall Street thugs out of his or her HIDING PLACES, and then hang them for the world to see over the INTERNET vs. T.V. going the way of the DO DO BIRD, like he did to Saddam Hussein so we become sure regarding who THE TERRORISTS are in our nation!

    For you must remember that, Mr. Buffett’s 2008/2009 “PEARL HARBOR” analogy needs to end with “THE NUREMBERG TRIALS!”

  • CarlK says:

    “Smoke em out, make them run, and then bring them to justice” because “The American People must understand…..”


  • Walter Scott says:

    Start with Stevie Boy

  • CarlK says:

    Let there be “JUSTICE” but let there be no BOUNDARY LINES which aren’t PENETRATED for their CRIMES against humanity including but not limited to the sovereignty of the United States of America as a result of their DESTRUCTIVE WORK inside of “capitalism.”

    He ain’t NO WONDER BOY except that he’s a mobbed up, mob connected, INSIDER TRADER. IMO


  • Anonymous says:

    Carlk, i know it’s way too much to wish for, but can you PLEASE stay on the topic of Level 3 refi.

    The Ramblings comment section has become the Carlk babble space. There are so many other places on the Internet where you can write your incoherent unrelated stream of consciousness DaDa views on anything you want.

    You subject the Ramblings’ readers to unrelated rants on unrelated topics and then proceed to respond to your unrelated posts as if it’s a dialog.

    Please, already, enough.

  • BA says:

    I have to agree with Anonymous here… your posts on ramblings and investor village are counter productive. You clearly know a lot about level (3) and have strong views, which I respect. Perhaps staying on topic and posting in a way we all understand would be better for all of us, yourself included.

  • CarlK says:

    How is identifying a CRIMINAL who works in concert with the back offices of WRONG STREET including but not limited to influencing the programming of their toxic black box algorithms, off topic to Level 3’s trading as well as Berkshire Hathaway this morning?

    Until I see the PERPETRATORS walking the plank for such criminal activities in our markets; I cannot shut up.

    Don’t ask Bernie Schaeffer for any “technical” clues specific to Level 3 today, mind you!


    But, the new financing is not only significantly over subscribed, it’s carrying a respectable interest rate as a “savings” on current debt being rolled and extended!


    P.S. The stock should have been UP all day long from beginning to end tied to the news!

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