TEXT-S&P rates Level 3 Communications term loan 'B+'

Wed Sep 26, 2012 11:47am EDT

Sept 26 - Standard & Poor's Ratings Services said today that it assigned its
'B+' issue-level rating and '1' recovery rating to Level 3 Financing Inc.'s $1.2
billion term loan (tranche B-II 2019) due 2019. Level 3 Financing Inc. is a
wholly owned subsidiary of Broomfield, Colo.-based Level 3 Communications Inc.
 (Level 3). The '1' recovery rating on this senior secured loan reflects
our expectation of very high (90% to 100%) recovery of principal in the event of
a default. The new facility will repay an aggregate of $1.2 billion of two term
loans (tranches B-II and B-III) due 2018. Other ratings on Level 3 and
subsidiaries, including the 'B-' corporate credit rating and the positive
outlook, are not affected by the new notes. Approximately $8.4 billion of debt
was reported at June 30, 2012 (excluding third-quarter financing transactions).

Level 3 is a facilities-based, global integrated provider of a range of 
communications services including voice, data, and broadband on its extensive 
long-haul and metropolitan fiber networks. The company's October 2011 $3 
billion acquisition of Global Crossing Ltd. expanded its footprint, especially 
in Latin America. Level 3 noted that as of the second quarter of this year, it 
had realized about 40% of what it ultimately projects to be $300 million of 
operating synergies from the Global Crossing acquisition. The positive outlook 
cites the potential for a one-notch upgrade if Level 3 demonstrates that it is 
successfully integrating Global Crossing and, further, is on track to realize 
at least the bulk of projected operating synergies. (For the complete 
corporate credit rating rationale, see the summary analysis on Level 3, to be 
published on RatingsDirect immediately following the release of this article.)

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RATINGS LIST
Level 3 Communications Inc. 
 Corporate Credit Rating                    B-/Positive/--

New Ratings
Level 3 Financing Inc.
 $1.2 bil. term loan due 2019               B+
   Recovery Rating                          1

Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.
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