Level 3 Communications Said to Seek $1.4 Billion in Loans

Level 3 Communications Inc., an international provider of fiber-based communication services, is seeking as much as $1.4 billion in loans to repay debt, according to two people with knowledge of the matter.

Bank of America Corp., Citigroup Inc., Morgan Stanley, Credit Suisse Group AG, Deutsche Bank AG and JPMorgan Chase & Co. are arranging the transaction, which includes a portion of at least $300 million due in 3.5 years and a slice of as much as $1.1 billion maturing in August 2019, said the people, who asked not to be identified because the deal is private.

Proceeds of the loans along with cash will be used to repay Level 3’s existing $1.4 billion senior secured term loan under its credit agreement maturing in March 2014, the people said.

Lenders will receive 101 soft-call protection through Aug. 1, 2013, the people said, meaning Level 3 would have to pay a one-cent premium to reprice the debt in its first year.

Level 3, based in Broomfield, Colorado, obtained a $1.4 billion loan to refinance debt in March 2007, paying interest at 2.25 percentage points more than the London interbank offered rate, according to data compiled by Bloomberg.

The company reported total gross debt of $8.8 billion in a July 25 regulatory filing.

Francie Bauer, a spokeswoman for Level 3, didn’t immediately respond to an e-mail requesting comment.

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