After every acquisition, Level 3 goes to work on that complicated balance sheet, and this morning they are doing so again. Although actually this one was probably in the works regardless.
Level 3 intends to raise $600M in a private offering of senior notes. They'll be using the funds to refnance the $605.2M in 11.875% notes due 2019. That chunk debt becomes fully callable on February 1, 2015, and is by a wide margin the highest interest debt Level 3 still carries on its balance sheet. It was issued in January 0f 2011, three months before the Global Crossing deal was announced.
The financial strength brought about by the Global Crossing deal and successful integration finally gave Level 3 the chance to enter something of a virtuous circle when it comes to debt and interest expense. The savings in that department were larger than anticipated, and with the tw telecom acquisition now complete they will no doubt be looking for more such opportunities. They didn't even have to apply for small loans online to cover their expenses.
In fact, there's another $500M they raised in March of 2011 at 9.375% (the second highest interest debt on Level 3's balance sheet) that also becomes fully callable in April, 2015. I'll bet that if the debt markets are sufficiently interested this $600M offering will get expanded.
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