CTL CenturyLink Inc

 

 

 

 

 

 

 

 

Check the appropriate box below if the Form filing is intended to simultaneously satisfy the filing obligations of any registrant under any of the following provisions:

 

 

 

 

Securities registered by Lumen Technologies, Inc. pursuant to Section 12(b) of the Act:

 

Indicate by check mark whether any registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule of the Securities Exchange Act of 1934 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

On March 16, 2023, Lumen Technologies, Inc. (“Lumen”) announced that its indirect wholly owned subsidiary, Level 3 Financing, Inc. (“Level 3 Financing”), had commenced offers to issue up to $1,100,000,000 principal amount of Level 3 Financing’s 10.500% Senior Secured Notes due 2030 (the “New Notes”) in exchange, subject to various caps and acceptance priority levels, for Lumen’s outstanding unsecured 5.625% Senior Notes, Series X, due 2025, 7.200% Senior Notes, Series D, due 2025, 5.125% Senior Notes due 2026, 6.875% Debentures, Series G, due 2028, 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 (collectively, the “Lumen Notes”) validly tendered in the exchange offers by eligible holders (the “Exchange Offers”), each of which is subject to the limitations, restrictions, terms and conditions set forth in Level 3 Financing’s Offering Memorandum dated March 16, 2023 (the “Offering Memorandum”), as supplemented by a current report on Form filed by Lumen and Level 3 Financing on March 27, 2023 and amended by the March 30 Press Release (defined below).

On March 30, 2023, Lumen issued a press release (the “March 30 Press Release”) announcing (i) early results with respect to the Exchange Offers and (ii) an increase in the 2029 Combined Cap (as described in such release) from $400,000,000 to $460,000,000.

On March 31, 2023, in connection with completing the early settlement of the Exchange Offers (the “Early Settlement Transactions”), Level 3 Financing issued approximately $915 million aggregate principal amount of New Notes in exchange for approximately $1.535 billion aggregate principal amount of Lumen Notes.

The Exchange Offers are only being 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 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 qualified offerees.” Additional information about the Exchange Offers appears below.

 

not guaranteed by Level 3 Financing or the guarantors of the New Notes, to the extent of the value of the assets of Level 3 Financing (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).

The New Notes are fully and unconditionally guaranteed, jointly and severally, on an unsubordinated and secured basis by Level 3 Parent and each Issuer Restricted Subsidiary (as defined in the Indenture) that becomes a guarantor pursuant to the terms of the Indenture (subject to receipt of the regulatory approvals described herein). The New Notes are not guaranteed by Lumen or any other member of the Lumen Credit Group. Each guarantee of the New Notes is (i) an unsubordinated and secured obligation of the applicable guarantor, ranking equal in right of payment with all existing and future indebtedness of the applicable guarantor that is not expressly subordinated in right of payment to the guarantee of such guarantor; (ii) secured on a senior lien basis by the collateral securing the guarantee, subject to a shared lien of equal priority with the other senior secured obligations of such guarantor secured by such collateral (which initially will consist of only a portion of the collateral securing such other secured indebtedness of such guarantor); (iii) effectively senior to all existing and future senior unsecured indebtedness of such guarantor to the extent of the value of the collateral provided by such guarantor (after giving effect to the sharing of such value with holders of equal ranking liens on such collateral); (iv) contractually senior in right of payment to all existing and future indebtedness of such guarantor that is expressly subordinated in right of payment to the guarantee of such guarantor; (v) effectively subordinated to any obligations of such guarantor secured by liens on assets of such guarantor that do not constitute collateral with respect to such guarantee, to the extent of the value of such assets; (vi) effectively subordinated to all liabilities of the subsidiaries (other than Level 3 Financing) of such guarantor that are not themselves guarantors and (vii) effectively senior to all liabilities of Lumen and the other members of the Lumen Credit Group that are not guaranteed by the Issuer or the guarantors of the New Notes, to the extent of the value of the assets of the guarantors (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).

The New Notes are subject to redemption at the option of Level 3 Financing, in whole or in part, at any time or from time to time (i) prior to May 15, 2026, at 100% of the principal amount of New Notes so redeemed plus the applicable “make-whole” premium set forth in the Indenture and accrued and unpaid interest thereon (if any) up to, but not including, the redemption date, and (ii) on and after May 15, 2026, at redemption prices (expressed as a percentage of principal amount) equal to (A) 105.250%, for redemptions between May 15, 2026 and May 14, 2027, (B) 102.625%, for redemptions between May 15, 2027 and May 14, 2028, and (C) 100.000%, for redemptions on or after May 15, 2028,, in each case, accrued and unpaid interest thereon (if any) up to, but not including, the redemption date. In addition, at any time or from time to time prior to May 15, 2026, Level 3 Financing may, at its option and subject to certain conditions, redeem up to 40% of the aggregate principal amount of the New Notes at a redemption price equal to 110.500% of the principal amount of the New Notes so redeemed, plus accrued and unpaid interest thereon (if any) to, but not including, the redemption date, with the net cash proceeds from one or more sales of equity by Level 3 Parent that meet the terms and conditions specified in the Indenture.

Upon the occurrence of certain specified change of control events, Level 3 Financing will be required, unless it has elected to redeem the New Notes as described above, to make an offer to repurchase the New Notes at a price in cash equal to 101% of their aggregate principal amount, plus accrued and unpaid interest thereon (if any) to, but not including, the date of repurchase.

The Indenture provides for customary events of default, including, among other things, the (i) failure to pay principal or premium (if any) or interest (subject to a grace period) on the New Notes when due; (ii) failure to perform specified covenants or other covenants continued for 90 days after written notice with respect thereto to Level 3 Financing by the Trustee or the holders of at least 30% of the aggregate principal amount of such New Notes then outstanding; or (iii) occurrence of certain specified defaults, judgments, bankruptcy proceedings, insolvencies or other events relating to Level 3 Parent, Level 3 Financing or certain of its significant subsidiaries. In addition, subject to the terms and conditions set forth in the Indenture, if certain specified events of default with respect to the New Notes occur and are continuing, the Trustee or holders of at least 30% of the aggregate principal amount of the New Notes then outstanding may declare the principal of the New Notes to be due and payable immediately.

The Indenture contains certain restrictive covenants that limit the incurrence of additional indebtedness, liens and certain corporate transactions. These covenants are subject to a number of important limitations and exceptions, and are subject to termination upon the occurrence of certain events described in the Indenture.

The New Notes have not been nor will be registered under the Securities Act, and the New Notes may not be offered or sold in the United States absent registration or an exemption from registration requirements. The New Notes were issued to (1) persons reasonably believed to be “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and 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 qualified offerees”.

The foregoing description of the Indenture does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Indenture and the form of New Notes, copies of each of which are filed as exhibits to this Current Report, and are incorporated by reference herein.

In reviewing the documents included as exhibits to this Current Report, please note that they are included to provide you with additional information regarding the terms of the Early Settlement Transactions and are not intended to provide any other factual or disclosure information about Level 3 Financing, Level 3 Parent or the other parties thereto. Additional information about Level 3 Parent may be found elsewhere in its public filings, which are available without charge through the website of the U.S. Securities and Exchange Commission at http://www.sec.gov.

Additional information about the Early Settlement Transactions is included in the press release filed as Exhibit 99.1 hereto.