Level 3 Seeks $595 Million Loan; Cincinnati Bell Refinances Debt

Level 3 Financing Inc., a unit of the U.S. telecommunications company, and telephone and Internet service provider Cincinnati Bell Inc. are tapping the U.S. leveraged-loan market to refinance debt.

Level 3 is seeking a $595.5 million term loan maturing in 2020 to repay bank debt that comes due in 2016, according to a person with knowledge of the transaction, who asked not to be identified because the information is private. Bank of America Corp., Citigroup Inc., Morgan Stanley, Credit Suisse Group AG, Jefferies Group Inc., and JPMorgan Chase & Co. are arranging the financing.

Cincinnati Bell is proposing to pay 3.25 percentage points more than the London interbank offered rate on a seven-year, $400 million term loan with a 1 percent minimum on the benchmark, according to another person with knowledge of the deal. Bank of America, Barclays Plc, Deutsche Bank AG and Morgan Stanley are arranging the transaction and commitments are due Aug. 20, the person said.

The average price on the largest first-lien loans fell 0.01 cent to 98.06 cents today, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 index. The floating-rate debt has returned 3.4 percent this year through yesterday, outpacing the 2.7 percent gains on the Bloomberg USD High Yield Corporate Bond Index.

A consortium including Hastings Funds Management Pty and Ontario Teachers’ Pension Plan is seeking to refinance A$1.64 billion ($1.5 billion) of loans used in 2012 to buy a 50-year lease to a desalination plant in Sydney, according to a person familiar with knowledge of the transaction. RBC Capital Markets is advising the group on the refinancing, the person said, asking not to be identified because the details are private.

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