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Technology Stocks : (LVLT) - Level 3 Communications
LVLT 53.630.0%Nov 1 5:00 PM EST
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From: Dwayne Hines10/4/2012 2:19:12 PM
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LVLT's ratings recognize, in part, the de-leveraging of the company's balance
sheet resulting from its acquisition of Global Crossing Limited (GLBC). Pro
forma for the acquisition and LVLT's senior note issuance, LVLT's leverage
declines to 6.2 times (x) for the latest 12 month (LTM) period ended June 30,
2012, compared with the company's actual leverage of 6.5x as of June 30, 2012,
and 8.1x as of Dec. 31, 2011. Moreover, based on the company's ability to
realize anticipated operating cost synergies, the GLBC acquisition positions
LVLT to further improve its credit profile and generate consistent levels of
free cash flow. The acquisition accelerates LVLT's progress in achieving its
target leverage ratio of 3.0x to 5.0x.

The Positive Outlook reflects Fitch's belief that LVLT's credit profile will
strengthen as the company achieves the cost synergies associated with the GLBC
acquisition. Fitch anticipates that LVLT's credit protection metrics during 2012
will remain relatively consistent with year-end 2011 pro forma metrics as
integration costs will largely offset positive operating momentum. Fitch expects
LVLT's leverage as of year-end 2012 (on a pro forma basis) will dip below 6.2x.
Fitch expects to observe the strengthening of LVLT's credit metrics during 2013
as cost synergies begin to take effect and integration costs begin to diminish.
Fitch envisages LVLT leverage will decline below 5.5x by the end of 2013.
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