Lumen Announces Early Tender Results of Exchange Offers for Unsecured Notes of Lumen and Level 3
Rhea-AI Summary
Lumen Technologies (NYSE: LUMN) announced early results of its exchange offers for unsecured notes of Lumen and Level 3. Lumen offered to exchange up to $500 million of new 10.000% Secured Notes due 2032 for certain outstanding unsecured senior notes. Level 3 Financing offered to exchange up to $350 million of new 10.000% Second Lien Notes due 2032 for its outstanding unsecured senior notes.
For Lumen's offer, $490,819,000 in notes were tendered, not reaching the $500 million cap. Lumen expects to issue $438,305,345 in new notes and pay $13,694,400 in cash. For Level 3's offer, the $350 million cap was reached, with $357,142,000 in notes expected to be accepted. Level 3 plans to issue $349,999,160 in new notes.
The exchange offers expire on October 1, 2024, unless extended. The early tender deadline has passed, and tendered notes can no longer be withdrawn.
Positive
- Lumen successfully tendered $490,819,000 in notes, close to the $500 million cap
- Level 3 reached its $350 million cap for note exchanges
- New notes offer higher interest rates (10.000%) compared to the existing notes being exchanged
Negative
- The exchange offers may lead to increased debt costs due to higher interest rates on new notes
- The exchange offers could potentially increase the company's secured debt obligations
News Market Reaction – LUMN
On the day this news was published, LUMN gained 1.12%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Lumen Exchange Offers
As previously announced, Lumen has offered to exchange (collectively, the "Lumen Exchange Offers") up to
5.125% Senior Notes due 2026 (the "2026 Lumen Notes");4.000% Senior Secured Notes due 2027 (Unsecured) (the "2027 Lumen Notes");6.875% Debentures, Series G, due 2028 (the "2028 Lumen Notes"); and4.500% Senior Notes due 2029 (the "2029 Lumen Notes" and, together with the 2026 Lumen Notes, the 2027 Lumen Notes and the 2028 Lumen Notes, the "Subject Lumen Notes");
subject to the terms and conditions set forth in Lumen's private offering memorandum, dated September 3, 2024 (the "Lumen Offering Memorandum"), including the
Based on data provided by Global Bondholder Services Corporation, the following table sets forth the approximate aggregate principal amount of each series of Subject Lumen Notes that (i) were validly tendered and not validly withdrawn on or prior to 5:00 p.m.,
Early Exchange Consideration | ||||||||
Subject Lumen | CUSIP | Aggregate Outstanding Principal Amount Prior to Exchange | Acceptance | New Notes | Aggregate Principal Amount Tendered as of the Early |
Aggregate | New Lumen | Cash |
2026 Lumen | 156700 BB1 / | 1 | N/A | |||||
2027 Lumen | 156700 BC9 / | 2 | N/A | N/A | ||||
2028 Lumen | 156686 AM9 | 3 | N/A | N/A | ||||
2029 Lumen | 156700 BD7 / | 4 | N/A | |||||
Because the aggregate principal amount of Subject Lumen Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Time did not reach the Lumen Notes Cap or the New Notes Series Cap, Lumen expects to accept for purchase all of the Subject Lumen Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Time on the terms and subject to the conditions described below.
On or about September 24, 2024 (such date, subject to change or cancellation without notice, the "Early Settlement Date"), Lumen currently expects to accept for purchase Subject Lumen Notes validly tendered and not validly withdrawn prior to the Early Tender Time in exchange for issuing
Subject Lumen Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Time will be accepted for purchase in accordance with the terms and subject to the conditions of the Lumen Offering Memorandum, including those governing the authorized minimum denominations of each series of Subject Lumen Notes that will be accepted in the Exchange Offers and the minimum denominations of New Lumen Notes that will be issued in exchange for such Subject Lumen Notes.
All Subject Lumen Notes that were validly tendered in a Lumen Exchange Offer at or prior to the Early Tender Time will have priority over Subject Lumen Notes that are validly tendered after the Early Tender Time, even if such Subject Lumen Notes tendered after the Early Tender Time have a higher Acceptance Priority Level than the Subject Lumen Notes tendered at or prior to the Early Tender Time and even if Lumen elects to forego an Early Settlement Date.
Level 3 Exchange Offers
As previously announced, Level 3 has offered to exchange (collectively, the "Level 3 Exchange Offers" and, together with the Lumen Exchange Offers, the "Exchange Offers") up to
3.400% Senior Secured Notes due 2027 (Unsecured) (the "3.400% Level 3 Notes");4.625% Senior Notes due 2027 (the "4.625% Level 3 Notes"); and4.250% Senior Notes due 2028 (the "4.250% Level 3 Notes" and, together with the3.400% Level 3 Notes and the4.625% Level 3 Notes, the "Subject Level 3 Notes" and, together with the Subject Lumen Notes, the "Subject Notes");
subject to the terms and conditions set forth in Level 3's private offering memorandum, dated September 3, 2024 (the "Level 3 Offering Memorandum").
Based on data provided by Global Bondholder Services Corporation, the following table sets forth the approximate aggregate principal amount of each series of Subject Level 3 Notes that (i) were validly tendered and not validly withdrawn on or prior to the Early Tender Time, and (ii) Level 3 expects to accept for purchase, subject to all conditions to the Exchange Offers having been satisfied or waived by Level 3.
Aggregate | Principal per | |||||
Subject Level 3 | CUSIP | Aggregate | Acceptance |
Aggregate Accepted | ||
527298 BP7 / | 1 | |||||
527298 BN2 / | 2 | |||||
527298 BR3 / | 3 |
Because the aggregate principal amount of Subject Level 3 Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Time reached the Level 3 Notes Cap, no Subject Level 3 Notes tendered for exchange after the Early Tender Time will be accepted for exchange, regardless of the Acceptance Priority Level thereof.
On or about the Early Settlement Date, Level 3 currently expects to accept for purchase Subject Level 3 Notes validly tendered and not validly withdrawn prior to the Early Tender Time in exchange for issuing
Subject Level 3 Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Time will be accepted for purchase in accordance with the terms and subject to the conditions of the Level 3 Offering Memorandum, including those governing the authorized minimum denominations of each series of Subject Level 3 Notes that will be accepted in the Exchange Offers and the minimum denominations of New Level 3 Notes that will be issued in exchange for such Subject Level 3 Notes.
Because the aggregate amount of New Level 3 Notes expected to be issued in exchange for Subject Level 3 Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Time would otherwise exceed the Level 3 Notes Cap, the
Additional Information about the Exchange Offers
The Exchange Offers will expire at 5:00 p.m.,
In addition to the Early Exchange Consideration described in the tables above, holders of Subject Notes will be entitled to accrued but unpaid interest with respect to the Subject Notes tendered and not withdrawn prior to the Early Tender Time from the latest applicable interest payment date to, but excluding, the date on which such Subject Notes are exchanged for New Notes (such date, the "Settlement Date"), subject to adjustments in certain limited circumstances described in the applicable Offering Memorandum.
The final Settlement Date, if applicable, for each Exchange Offer is expected to be on or about the third business day following the Expiration Time, subject to all conditions to such Exchange Offer having been satisfied or waived by the applicable Issuer.
Lumen may amend, extend, terminate or withdraw any or all of the Lumen Exchange Offers (including by modifying the amount of the Lumen Notes Cap or New Notes Series Cap), and Level 3 may amend, extend, terminate or withdraw any or all of the Level 3 Exchange Offers (including by modifying the amount of the Level 3 Notes Cap), in each case, (i) in their sole discretion without extending the applicable Withdrawal Deadline or amending the withdrawal rights of any applicable Eligible Holder (as described below), and (ii) regardless of whether any other Exchange Offer is amended, extended, terminated or withdrawn.
Eligible Holders
The Exchange Offers have only been made, and the New Notes are only being offered and will only be issued, to Eligible Holders of Subject Notes. An Eligible Holder of Subject Notes is a beneficial owner of Subject Notes that (i) makes the certifications in the eligibility certification that it is a (a) "qualified institutional buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act")) or (b) non-
For further information, 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).
No Registration
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
Each Issuer is making its respective Exchange Offers solely through and pursuant to the terms of the applicable Offering Memorandum. None of Lumen, Level 3, 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 or any portion of the principal amount of such holder's Subject Notes for New Notes in the Exchange Offers. Eligible Holders must make their own independent evaluation of the financial merits of the applicable Exchange Offer and the information included in the applicable Offering Memorandum. In making an investment decision, Eligible Holders must rely on their own independent examination of the value of the applicable Subject Notes and the applicable New Notes, the issuer of such New Notes, and the terms of the applicable Exchange Offer and New Notes, including the merits and risks involved with exchanging Subject Notes for New Notes and cash consideration (as applicable).
This press release does not constitute (i) an offer to sell, or a solicitation of an offer to buy, the New Notes, (ii) an offer to buy, or a solicitation of an offer to sell, the Subject Notes, or (iii) a solicitation to participate in the Exchange Offers, which are being made solely in accordance with the Offering Memoranda. The Offering Memoranda do not constitute an offer of the New Notes, or a solicitation to participate in the Exchange Offers, to any person in any jurisdiction in which it would be unlawful to make such offer or solicitation or the Exchange Offers under applicable securities or blue sky laws.
About Lumen Technologies
Lumen connects the world. We are igniting business growth 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.
Forward-Looking Statements
Except for historical and factual information, the matters set forth in this release and other oral or written statements of the Issuers identified by words such as "estimates," "expects," "anticipates," "believes," "plans," "intends," "will," and similar expressions are forward-looking statements as defined by the federal securities laws, and are subject to the "safe harbor" protections thereunder. 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 the Issuers. Actual events and results may differ materially from those anticipated, estimated, projected, or implied by the Issuers 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 Issuers to consummate 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 Issuers; changes in the cash requirements, financial position, financing plans, or investment plans of the Issuers; changes in general market, economic, tax, regulatory, or industry conditions; and other risks referenced from time to time in filings with the
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SOURCE Lumen Technologies
FAQ
What is the deadline for Lumen's exchange offers (LUMN)?
How much in new notes does Lumen (LUMN) expect to issue in the exchange?
What is the interest rate on the new notes being offered by Lumen (LUMN) and Level 3?
How much was the cap for Level 3's exchange offer, and was it reached?
