DENVER, March 16, 2023 /PRNewswire/ -- Lumen
Technologies, Inc. (NYSE: LUMN) ("Lumen") announced that its
indirect, wholly owned subsidiary, Level 3 Financing, Inc. (the
"Issuer"), has commenced offers to issue senior secured notes in
exchange for senior unsecured notes of Lumen.
Specifically, the Issuer has commenced offers to issue up to
$1,100,000,000 principal amount (the
"New Notes Cap") of new 10.500% Senior Secured Notes due 2030 of
the Issuer (the "New Notes") in exchange for validly tendered
outstanding senior notes issued by Lumen listed in the table below
(collectively, the "Lumen Notes") upon the terms and conditions set
forth in the offering memorandum, dated March 16, 2023 (the "Offering Memorandum").
The following table sets forth each series of Lumen Notes
subject to the Exchange Offers, the acceptance priority level (the
"Acceptance Priority Level") for such series and the applicable
consideration offered for such series in the applicable exchange
offer (each, an "Exchange Offer" and collectively, the "Exchange
Offers").
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Principal Amount
of
New Notes(1)
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Title of Series of
Lumen Notes
|
CUSIP
Number(s)
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Aggregate
Outstanding
Principal Amount
|
Acceptance
Priority
Level(2)
|
New
Notes
Series
Caps
|
Early Exchange
Consideration,
if Tendered and
Not Withdrawn
at or Prior to
the Early
Tender Date
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Late Exchange
Consideration, if
Tendered After
the Early Tender
Date and at or
Prior to the Expiration
Date
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5.625% Senior Notes,
Series X, due 2025
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156700AZ9
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$206,030,000
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1
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N/A
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$920.00
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$870.00
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7.200% Senior Notes,
Series D, due 2025
|
156686AJ6
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$65,801,000
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2
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N/A
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$920.00
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$870.00
|
5.125% Senior Notes due
2026
|
156700BB1/
U1566PAB1
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$702,956,000
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3
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N/A
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$710.00
|
$660.00
|
6.875% Debentures,
Series G, due 2028
|
156686AM9
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$294,929,000
|
4
|
N/A
|
$680.00
|
$630.00
|
5.375% Senior Notes due
2029
|
550241AA1/
U54985AA1
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$506,394,000
|
5
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$400,000,000(3)
|
$550.00
|
$500.00
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4.500% Senior Notes due
2029
|
156700BD7/
U1566PAD7
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$967,338,000
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6
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$550.00
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$500.00
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7.600% Senior Notes,
Series P, due 2039
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156700AM8
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$518,000,000
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7
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$250,000,000(4)
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$525.00
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$475.00
|
7.650% Senior Notes,
Series U, due 2042
|
156700AT3
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$435,268,000
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8
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$525.00
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$475.00
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(1)
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For each $1,000
principal amount of Lumen Notes. In addition to the Early Exchange
Consideration (as defined below) or Late Exchange Consideration (as
defined below), as applicable, Eligible Holders will also receive
accrued and unpaid interest in respect of Lumen Notes
exchanged.
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(2)
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Subject to the New
Notes Series Caps (as defined below), all Lumen Notes that are
tendered for exchange in an Exchange Offer at or prior to the Early
Tender Date (as defined below) will have priority over Lumen Notes
that are tendered for exchange after the Early Tender Date, even if
such Lumen Notes tendered after the Early Tender Date have a higher
Acceptance Priority Level than Lumen Notes tendered at or prior to
the Early Tender Date and even if the Issuer does not elect to have
an Early Settlement Date. The maximum aggregate principal amount of
New Notes that the Issuer will issue in the Exchange Offers equals
$1,100,000,000, which the Issuer reserves the right to increase at
any time in its sole discretion, subject to compliance with
applicable law and the terms of its outstanding indebtedness and
subject to the New Notes Series Caps.
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(3)
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The Issuer will not
issue more than $400,000,000 of New Notes (the "2029 Combined Cap")
in exchange for tendered 5.375% Senior Notes due 2029 and 4.500%
Senior Notes due 2029.
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(4)
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The Issuer will not
issue more than $250,000,000 of New Notes (the "2039 and 2042
Combined Cap") in exchange for tendered 7.600% Senior Notes, Series
P, due 2039 and 7.650% Senior Notes, Series U, due 2042. Together,
the 2029 Combined Cap and 2039 and 2042 Combined Cap are referred
to as the "New Notes Series Caps".
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The New Notes will mature May 15,
2030 and pay interest at a rate of 10.500% per annum. The
New Notes will be (i) secured by the same collateral and (ii)
guaranteed by the same entities that secure and guarantee the
Issuer's outstanding secured notes, in each case subject to the
receipt of the regulatory approvals described in the Offering
Memorandum (which are consistent with the approvals obtained in
prior offerings by the Issuer). In addition, the restrictive
covenants and events of default with respect to the New Notes will
be substantially similar to those applicable to the Issuer's
outstanding secured notes.
The New Notes (i) will be unsubordinated and secured obligations
of the Issuer, ranking equal in right of payment with all existing
and future indebtedness of the Issuer that is not expressly
subordinated in right of payment to the New Notes; (ii) will be
secured on a senior lien basis by the collateral securing the New
Notes, subject to a shared lien of equal priority with the other
senior secured obligations of the Issuer secured by such collateral
of the Issuer, and subject to other liens permitted by the New
Notes' indenture; (iii) will be effectively senior to all existing
and future senior unsecured indebtedness of the Issuer to the
extent of the value of the collateral provided by the Issuer (after
giving effect to the sharing of such value with holders of equal
ranking liens on such collateral); (iv) will be contractually
senior in right of payment to all existing and future indebtedness
of the Issuer that is expressly subordinated in right of payment to
the New Notes; (v) will be effectively subordinated to any
obligations of the Issuer secured by liens on assets of the Issuer
that do not constitute collateral with respect to the New Notes, to
the extent of the value of such assets; (vi) will be effectively
subordinated to all liabilities of the Issuer's subsidiaries that
are not guarantors and (vii) will be effectively senior to all
liabilities of Lumen and the other members of Lumen's credit group
that are not guaranteed by the Issuer or the guarantors of the New
Notes (including the Lumen Notes that remain outstanding following
completion of the Exchange Offers), to the extent of the value of
the assets of the Issuer (after giving effect to the sharing of
such value with holders of equal ranking obligations or, in the
case of assets constituting collateral, with holders of equal
ranking liens on such collateral).
Subject to the receipt of certain applicable regulatory
approvals, the New Notes will be fully and unconditionally
guaranteed, jointly and severally, on an unsubordinated and secured
basis by the Issuer's parent company, Level 3 Parent, LLC, and
various subsidiaries, but not by Lumen or members of Lumen's credit
group.
The Exchange Offers are being made only to Eligible Holders (as
defined below). Eligible Holders must validly tender (and not
validly withdraw) their Lumen Notes at or prior to 5:00 p.m., New York
City time, on March 29, 2023
(the "Early Tender Date"), in order to be eligible to receive the
applicable "Early Exchange Consideration" shown in the table above.
Lumen Notes validly tendered (and not validly withdrawn) after the
Early Tender Date but prior to the Expiration Date (as defined
below) will be eligible to receive the applicable "Late Exchange
Consideration" shown in such table.
The Exchange Offers will expire at 5:00
p.m., New York City time,
on April 13, 2023, unless extended
(such time and date with respect to an Exchange Offer, as it may be
extended for such Exchange Offer, the "Expiration Date"). The final
settlement date for the Exchange Offers will occur promptly after
the Expiration Date and is expected to occur on April 17, 2023 (the "Final Settlement Date"),
subject to all conditions to the Exchange Offers having been
satisfied or waived by the Issuer. The Issuer may elect, in its
sole discretion, to settle an Exchange Offer for any or all series
of Lumen Notes and issue the New Notes with respect to such Lumen
Notes validly tendered at or prior to the Early Tender Date (and
not validly withdrawn) at any time after the Early Tender Date and
at or prior to the Expiration Date (the "Early Settlement Date").
Such Early Settlement Date will be determined at the Issuer's
option and, if elected, would be expected to occur on or after
March 31, 2023, subject to all
conditions to the Exchange Offers having been satisfied or waived
by the Issuer.
In addition to the Early Exchange Consideration or the Late
Exchange Consideration, as applicable, the Issuer will pay (or
cause Lumen to pay) in cash accrued and unpaid interest on the
Lumen Notes accepted for exchange in the Exchange Offers from the
applicable latest interest payment date to, but not including, the
Early Settlement Date or the Final Settlement Date, as applicable.
Interest on the New Notes will accrue from the date of first
issuance of New Notes and, as described above, the Issuer may
elect, in its sole discretion, to settle on the Early Settlement
Date the Exchange Offers for any or all series of Lumen Notes and
issue New Notes with respect to such Lumen Notes validly tendered
at or prior to the Early Tender Date (and not validly withdrawn).
If the Issuer elects to have an Early Settlement Date, any New
Notes issued on the Final Settlement Date will be issued with
accrued interest from the Early Settlement Date and to, but not
including, the Final Settlement Date, subject to various
adjustments described in the Offering Memorandum.
Tenders may be validly withdrawn at any time at or prior to
5:00 p.m., New York City time, on March 29, 2023, but not thereafter unless
required by law (the "Withdrawal Deadline"). The Issuer reserves
the right to increase any of the New Notes Cap or the New Notes
Series Caps at any time in its sole discretion without extending
the Early Tender Date or Withdrawal Deadline or otherwise
reinstating withdrawal rights, subject to compliance with
applicable law and the terms of the Issuer's outstanding
indebtedness. Accordingly, Eligible Holders should not tender any
Lumen Notes that they do not want to have accepted for
exchange.
Except as described in the following paragraph and subject to
the New Notes Series Caps, all Lumen Notes validly tendered and not
validly withdrawn having a higher Acceptance Priority Level will be
accepted for exchange before any Lumen Notes tendered having a
lower Acceptance Priority Level will be accepted for exchange (with
1 being the highest Acceptance Priority Level and 8 being the
lowest Acceptance Priority Level). Accordingly, subject to the New
Notes Cap and New Notes Series Caps, all Lumen Notes with an
Acceptance Priority Level 1 will be accepted for exchange before
any Lumen Notes with an Acceptance Priority Level 2, and so on,
until the New Notes Cap or applicable New Notes Series Cap is
allocated. Once all Lumen Notes tendered in a certain Acceptance
Priority Level have been accepted for exchange, subject to the New
Notes Series Caps, Lumen Notes from the next Acceptance Priority
Level may be accepted for exchange. If the remaining portion of the
New Notes Cap is adequate to exchange some but not all of the
aggregate principal amount of Lumen Notes tendered within the next
Acceptance Priority Level, Lumen Notes tendered for exchange in
that Acceptance Priority Level will be accepted for exchange on a
pro rata basis, based on the aggregate principal amount of
Lumen Notes tendered with respect to that Acceptance Priority
Level, and no Lumen Notes with a lower Acceptance Priority Level
will be accepted for exchange, subject to the New Notes Series
Caps.
Notwithstanding the foregoing, subject to the New Notes Series
Caps, all Lumen Notes that are tendered for exchange in an Exchange
Offer at or prior to the Early Tender Date will have priority over
Lumen Notes that are tendered for exchange after the Early Tender
Date, even if such Lumen Notes tendered after the Early Tender Date
have a higher Acceptance Priority Level than Lumen Notes tendered
at or prior to the Early Tender Date and even if the Issuer does
not elect to have an Early Settlement Date. If, subject to the New
Notes Series Caps, the principal amount of Lumen Notes validly
tendered at or prior to the Early Tender Date constitutes a
principal amount of Lumen Notes that, if accepted for exchange by
the Issuer, would result in it issuing New Notes having an
aggregate principal amount equal to or in excess of the New Notes
Cap, the Issuer will not accept any Lumen Notes tendered for
exchange after the Early Tender Date, regardless of the Acceptance
Priority Level of such Lumen Notes, unless the Issuer increases the
New Notes Cap. If the principal amount of 5.375% Senior Notes due
2029, 4.500% Senior Notes due 2029, 7.600% Senior Notes, Series P,
due 2039 and 7.650% Senior Notes, Series U, due 2042 validly
tendered at or prior to the Early Tender Date constitutes a
principal amount of Lumen Notes that, if accepted for exchange by
the Issuer, would result in the issuance of New Notes in an
aggregate principal amount equal to or in excess of the 2029
Combined Cap or the 2039 and 2042 Combined Cap, the Issuer will not
accept any 4.500% Senior Notes due 2029 or 5.375% Senior Notes due
2029 (in the case of the 2029 Combined Cap) or any 7.600% Senior
Notes, Series P, due 2039 or 7.650% Senior Notes, Series U, due
2042 (in the case of the 2039 and 2042 Combined Cap) tendered for
exchange after the Early Tender Date, regardless of the Acceptance
Priority Level of such Lumen Notes, unless the Issuer increases the
applicable New Notes Series Cap.
The Exchange Offers are conditioned on the satisfaction or
waiver of certain customary conditions, as described in the
Offering Memorandum. The Issuer may terminate, withdraw, amend or
extend any of the Exchange Offers, in its sole discretion. The
Exchange Offers are not conditioned upon any minimum amount of
Lumen Notes being tendered. Each Exchange Offer is being made
independently of the other Exchange Offers, and is not conditioned
upon the completion of any of the other Exchange Offers.
The Exchange Offers will only be made, and the New Notes are
only being offered and will only be issued, (1) to persons
reasonably believed to be "qualified institutional buyers" as
defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"), or (2) to non-U.S. persons outside
the United States as defined in
Rule 902 under the Securities Act in transactions in compliance
with Regulation S under the Securities Act, who are "non-U.S.
qualified offerees" (as defined in the eligibility letter) (such
holders, the "Eligible Holders"). Only Eligible Holders who have
properly completed and submitted the eligibility certification
attached to the eligibility letter and, in the case of Canadian
residents, the Canadian certification form, are authorized to
receive or review the Offering Memorandum and participate in the
Exchange Offers. Holders who desire to obtain and complete an
eligibility letter should either visit the website for this purpose
at https://www.gbsc-usa.com/eligibility/lumen or call Global
Bondholder Services Corporation, the Exchange and Information Agent
for the Exchange Offers at (855) 654-2014 (toll-free) or (212)
430-3774 (collect for banks and brokers).
The New Notes and the offering thereof have not been registered
under the Securities Act or any state or foreign securities laws,
and may not be offered or sold in the
United States or to any U.S. persons except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state securities laws. Holders of New Notes will not be granted any
registration rights. Investors should be aware that they may be
required to bear the financial risks of this investment for an
indefinite period of time. Only holders of Lumen Notes who certify
in writing that they are Eligible Holders are authorized to
participate in the Exchange Offers.
The Issuer is making the Exchange Offers through, and pursuant
to, the terms of the Offering Memorandum. None of Lumen, the
Issuer, the dealer managers for the Exchange Offers, any affiliate
of any of them, or any other person makes any recommendation as to
whether Eligible Holders should tender or refrain from tendering
all of any portion of the principal amount of such holder's Lumen
Notes for New Notes in the Exchange Offers. Eligible Holders must
make their own independent decision as to whether to tender Lumen
Notes and, if so, the amount of the Lumen Notes as to which such
action is to be taken.
The Exchange Offers are an opportunistic implementation of
Lumen's announced capital allocation priorities, expected to reduce
Lumen's consolidated indebtedness, further strengthening Lumen's
consolidated balance sheet.
This press release does not constitute an offer of, or an
invitation to participate in, the Exchange Offers to any person in
any jurisdiction in which it would be unlawful to make such offer
or invitation or Exchange Offers under applicable securities or
blue sky laws.
About Lumen
Lumen connects the world. We are dedicated to furthering human
progress through technology by connecting people, data,and
applications – quickly, securely, and effortlessly. Everything we
do at Lumen takes advantage of our network strength. From metro
connectivity to long-haul data transport to our edge cloud,
security, and managed service capabilities, we meet our customers'
needs today and as they build for tomorrow. For news and insights
visit news.lumen.com, LinkedIn: /lumentechnologies, Twitter:
@lumentechco, Facebook: /lumentechnologies, Instagram:
@lumentechnologies, and YouTube: /lumentechnologies.
Lumen and Lumen Technologies are registered trademarks of Lumen
Technologies LLC in the United
States. Lumen Technologies LLC is a wholly-owned affiliate
of Lumen Technologies, Inc.
Forward Looking Statements
Except for historical and factual information, the matters set
forth in this release and other oral or written statements of
Lumen, the Issuer or their affiliates identified by words such as
"estimates," "expects," "anticipates," "believes," "plans,"
"intends," and similar expressions are forward-looking statements.
These forward-looking statements are not guarantees of future
results and are based on current expectations only, are inherently
speculative, and are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of Lumen, the
Issuer or their affiliates. Actual events and results may differ
materially from those anticipated, estimated, projected or implied
by Lumen, the Issuer or their affiliates in those statements if one
or more of these risks or uncertainties materialize, or if
underlying assumptions prove incorrect. Factors that could affect
actual results include but are not limited to: the ability of the
Issuer to consummate the Exchange Offers; the possibility that the
Eligible Holders will not be receptive to the Exchange Offers;
corporate developments that could preclude, impair or delay the
aforementioned transactions due to restrictions under the federal
securities laws; changes in the credit ratings of the Issuer or its
affiliates; changes in the cash requirements, financial position,
financing plans or investment plans of the Issuer or its
affiliates; changes in general market, economic, tax, regulatory or
industry conditions; and other risks referenced from time to time
in filings with the U.S. Securities and Exchange Commission ("SEC")
of Lumen or Level 3 Parent, LLC. For all the reasons set forth
above and in the SEC filings of Lumen and Level 3 Parent, LLC, you
are cautioned not to unduly rely upon any forward-looking
statements, which speak only as of the date made. Neither Lumen nor
the Issuer undertakes any obligation to publicly update or revise
any forward-looking statements for any reason, whether as a result
of new information, future events or developments, changed
circumstances, or otherwise. Furthermore, any information about the
intentions of Lumen, the Issuer or their affiliates contained in
any forward-looking statements reflects the intentions of such
companies as of the date of such forward-looking statement, and is
based upon, among other things, existing regulatory, industry,
economic and market conditions, and their assumptions as of such
date. Lumen, the Issuer or their affiliates may change their
intentions, strategies or plans (including the plans expressed
herein) without notice at any time and for any reason.
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SOURCE Lumen Technologies