Merrill Lynch Agents Level 3 $1.2B Tranche B Refinance
Level 3 Communications announced that its subsidiary, Level 3 Financing, completed the marketing of the refinancing of its $1.2 billion senior secured tranche B-II 2019 term loan and received commitments to increase the aggregate principal amount of its existing tranche B 2020 term loan by $1.2 billion. According to an August 16, 2013 SEC filing, Merrill Lynch Capital is administrative agent.
The refinancing of the tranche B-II 2019 term loan will be accomplished through the expansion of the existing tranche B 2020 term loan by $1.2 billion to a new total of $1.795 billion.
The $1.795 billion tranche B 2020 term loan will continue to bear interest at LIBOR plus 3.00 percent, with a minimum LIBOR of 1.00 percent, and will mature on Jan. 15, 2020. The additional portion of the tranche B 2020 term loan was priced to lenders at par, with the payment to the lenders of an upfront 25 basis point fee at closing. The prior tranche B-II 2019 term loan had an interest rate of LIBOR plus 3.25 percent, with a minimum LIBOR of 1.50 percent and a maturity date of Oct. 4, 2019. The company anticipates saving approximately $9 million of cash interest expense on an annualized basis.
As a result of the transaction, the company expects to incur a loss on the refinancing of $13 million and approximately $0.06 per share in the fourth quarter 2013.
The closing of the refinancing transaction is expected to be completed on Oct. 4, 2013, subject to execution of definitive documentation and customary closing conditions.
Level 3 Communications is a Fortune 500 company that provides local, national and global communications services to enterprise, government and carrier customers.