LVLT has accelerated the conversion of $490 in debt into equity, reducing its annual interest expense by approximately $47 million
Level 3 Signs Agreement to Exchange Debt for Equity
Thursday January 11, 4:05 pm ET
BROOMFIELD, Colo., Jan. 11 /PRNewswire-FirstCall/ -- Level 3 Communications, Inc. (Nasdaq: LVLT - News) today announced that pursuant to an exchange agreement, Southeastern Asset Management, on behalf of certain investment accounts, and Legg Mason Opportunity Trust have agreed to exchange $490 million aggregate principal amount of Level 3's 10% Convertible Senior Notes due 2011 for a total of approximately 160.1 million shares of Level 3's common stock, equivalent to approximately 326.78 shares per $1,000 note, and the payment of accrued and unpaid interest on the notes to the closing date. The shares of common stock to be issued under this agreement are exempt from registration pursuant to Section 3(a)(9) under the Securities Act of 1933, as amended. The notes are currently convertible into shares of Level 3's common stock at a rate of 277.77 shares per $1,000 note.
As a result of the exchange, the company expects to reduce its 2007 cash interest expense by approximately $47 million. The notes are callable by the company on May 1, 2009.
"This transaction is positive for our company as it helps us delever and reduce interest expense," said Sunit S. Patel, CFO of Level 3. "Throughout 2007, we expect to continue taking steps operationally and financially to improve our financial position."
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