Obligation LevelThree Funding Inc. 5.375% ( US527298BK81 ) en USD

LevelThree Funding Inc.

100 % ▼

Etas-Unis

US527298BK81 ( en USD )

5.375% par an ( paiement semestriel )

14/01/2024 - Obligation échue

Prospectus brochure de l'obligation Level 3 Financing Inc US527298BK81 en USD 5.375%, échue

1 000 USD

897 010 000 USD

527298BK8

N/A

Level 3 Financing Inc. est une société de financement spécialisée dans les prêts aux entreprises, offrant un large éventail de solutions de financement, notamment des prêts commerciaux, des lignes de crédit et du financement par le biais de facteurs.

L'obligation US527298BK81 émise par Level 3 Financing Inc. aux États-Unis, d'un montant total de 897 010 000 USD, avec un coupon de 5,375%, échéant le 14/01/2024, a été remboursée à son prix nominal de 100%, par tranche minimale de 1000 USD et avec une fréquence de paiement semestrielle.

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Table of Contents
Table of Contents
File d Pursua nt t o Rule 4 2 4 (b)(3 )
Re gist ra t ion File N o. 3 3 3 -2 1 0 1 4 9
Prospe c t us
Le ve l 3 Fina nc ing, I nc .
Offe r t o Ex c ha nge
up t o $ 9 0 0 ,0 0 0 ,0 0 0 princ ipa l a m ount of it s 5 .3 7 5 % Se nior N ot e s due 2 0 2 4
w hic h ha ve be e n re gist e re d unde r t he Se c urit ie s Ac t of 1 9 3 3
for
a ny a nd a ll of it s out st a nding unre gist e re d 5 .3 7 5 % Se nior N ot e s due 2 0 2 4
Gua ra nt e e d by Le ve l 3 Com m unic a t ions, I nc .
a nd Le ve l 3 Com m unic a t ions, LLC
This is an offer to exchange new 5.375% Senior Notes due 2024 (the "new notes") of Level 3 Financing, Inc. (the "Issuer") that
have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for the Issuer's currently outstanding,
unregistered 5.375% Senior Notes due 2024 (the "original notes" and together with the new notes, the "notes").
T e rm s of t he ne w not e s offe re d in t he e x c ha nge offe r:
·
The terms of the new notes are substantially identical to the terms of the original notes that were issued on November 13,
2015, except that the new notes will be registered under the Securities Act, will not contain any legend restricting their
transfer, registration rights or provisions for special interest and will bear different CUSIP numbers.
·
There is no established trading market for the new notes, and neither the Issuer nor Level 3 Communications, Inc. intends
to apply for listing of the new notes on any securities exchange.
·
The original notes are, and the new notes will be, fully and unconditionally and jointly and severally guaranteed on an
unsubordinated unsecured basis by Level 3 Communications, Inc. and Level 3 Communications, LLC.
T e rm s of e x c ha nge offe r:
·
The exchange offer expires at 5:00 p.m., New York City time, on May 25, 2016, unless it is extended.
·
Original notes that are validly tendered and not validly withdrawn before the exchange offer expires will be exchanged for
an equal principal amount of new notes.
·
Tenders of original notes may be withdrawn at any time prior to the expiration of the exchange offer.
·
None of the Issuer, Level 3 Communications, Inc. or Level 3 Communications, LLC will receive any proceeds from
issuance of the new notes in the exchange offer.
Se e "Risk Factors" be ginning on pa ge 1 5 for a disc ussion of m a t t e rs t ha t pa rt ic ipa nt s in
t he e x c ha nge offe r should c onside r.
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Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of
these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
T he da t e of t his prospe c t us is April 2 7 , 2 0 1 6
Table of Contents
T his prospe c t us inc orpora t e s im port a nt busine ss a nd fina nc ia l inform a t ion a bout t he I ssue r a nd Le ve l 3
Com m unic a t ions, I nc . t ha t is not inc lude d in or de live re d w it h t his prospe c t us. Le ve l 3 w ill provide t his
inform a t ion t o you a t no c ha rge upon w rit t e n or ora l re que st dire c t e d t o: V ic e Pre side nt , I nve st or Re la t ions,
Le ve l 3 Com m unic a t ions, I nc ., 1 0 2 5 Eldora do Blvd., Broom fie ld, CO 8 0 0 2 1 , 7 2 0 -8 8 8 -2 5 0 1 . I n orde r t o e nsure
t im e ly de live ry of t he inform a t ion, a ny re que st should be m a de by M a y 1 8 , 2 0 1 6 .
Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will
deliver a prospectus in connection with any resale of such new notes. The letter of transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.
This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales
of new notes received in exchange for original notes where such new notes were acquired by such broker-dealer as a result of market-
making activities or other trading activities. The Issuer and Level 3 Communications, Inc. have agreed that, starting on the date hereof
(the "Expiration Date") and ending on the close of business on the day that is 270 days following the Expiration Date, they will make
this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."
Neither the Issuer nor Level 3 Communications, Inc. has authorized any person to give you any information or to make any
representations about the exchange offer other than those contained in this prospectus. If you are given any information or
representations that are not discussed in this prospectus, you must not rely on that information or those representations. This
prospectus is not an offer to sell or a solicitation of an offer to buy any securities other than the securities to which it relates. In addition,
this prospectus is not an offer to sell or the solicitation of an offer to buy those securities in any jurisdiction in which the offer or
solicitation is not authorized, or in which the person making the offer or solicitation is not qualified to do so, or to any person to whom it
is unlawful to make an offer or solicitation. The delivery of this prospectus and any exchange made under this prospectus do not, under
any circumstances, mean that there has not been any change in the affairs of Level 3 Financing, Inc. or Level 3 Communications, Inc.
since the date of this prospectus or that information contained in this prospectus is correct as of any time subsequent to its date.
Table of Contents
T a ble of Cont e nt s
SUMMARY

1
RATIO OF EARNINGS TO FIXED CHARGES

15
RISK FACTORS

15
USE OF PROCEEDS

21
SELECTED HISTORICAL FINANCIAL DATA OF LEVEL 3

22
THE EXCHANGE OFFER

26
DESCRIPTION OF INDEBTEDNESS OF LEVEL 3 COMMUNICATIONS, INC. AND THE ISSUER
37
DESCRIPTION OF THE NOTES

47
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
105
PLAN OF DISTRIBUTION
110
LEGAL MATTERS
111
EXPERTS
111
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
112
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Ca ut iona ry Fa c t ors T ha t M a y Affe c t Fut ure Re sult s
This prospectus contains or incorporates by reference forward looking statements and information that are based on the beliefs of
management as well as assumptions made by and information currently available to Level 3 (as defined below). When used in this
prospectus, the words "plan," "estimate," "expect," "anticipate," "believe," "intend," "goal," "seek," "project," "strategy," "future," "likely,"
"may," "should," "will" and similar expressions, as they relate to Level 3 or its management, are intended to identify forward- looking
statements. These statements reflect the current views of Level 3 with respect to future events and are subject to certain risks,
uncertainties, and assumptions.
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described in this document. These forward looking statements include, among others, statements
concerning:
·
expectations as to Level 3's future revenue, margins, expenses, cash flows, profitability and capital requirements;
·
the communications business of Level 3, its advantages and Level 3's strategy for continuing to pursue its business;
·
anticipated development and launch of new services in Level 3's business;
·
anticipated dates on which Level 3 will begin providing certain services or reach specific milestones;
·
growth of the communications industry;
·
Level 3's integration of the operations of companies that Level 3 acquires and the anticipated benefits and synergies in
connection with those acquisitions; and
·
other statements of expectations, beliefs, future plans and strategies, anticipated developments and other matters that are
not historical facts.
These statements are subject to risks and uncertainties, including financial, regulatory, environmental, industry growth and trend
projections, that could cause actual events or results to differ materially from those expressed or implied by the statements. The most
important factors that could prevent Level 3 from achieving its stated goals include, but are not limited to, the effects on Level 3's
business and its customers of general economic and financial market conditions as well as Level 3's failure to:
·
increase revenue and free cash flow from the services Level 3 offers;
·
successfully use new technology and information systems to support new and existing services;
·
prevent process and system failures that significantly disrupt the availability and quality of the services that Level 3
provides;
·
prevent Level 3's security measures from being breached, or its services from being degraded as a result of security
breaches;
·
develop new services that meet customer demands and generate acceptable margins;
·
effectively manage expansions to Level 3's operations;
·
provide services that do not infringe the intellectual property and proprietary rights of others;
·
attract and retain qualified management and other personnel; and
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·
meet all of the terms and conditions of Level 3's debt obligations.
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Except as required by applicable law and regulations, Level 3 undertakes no obligation to publicly update any statements, whether
as a result of new information, future events or otherwise. Further disclosures that Level 3 makes on related subjects in Level 3's
additional filings with the Securities and Exchange Commission (the "SEC") should be consulted. For further information regarding the
risks and uncertainties that may affect Level 3's future results, please review the information set forth below under "Risk Factors" and in
the filings of Level 3 Communications, Inc. ("Parent") with the SEC that are incorporated by reference in this prospectus, including
Parent's Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 26, 2016.
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SU M M ARY
This summary highlights information contained elsewhere or incorporated by reference in this prospectus and does not contain all
the information you should consider before tendering original notes in the exchange offer. You should carefully read the entire
prospectus, including the documents incorporated in it by reference. This prospectus and the letter of transmittal that accompanies it
collectively constitute the exchange offer.
In this prospectus, (i) Level 3 Financing, Inc., the issuer of the notes and a direct, wholly owned subsidiary of Level 3
Communications, Inc., is referred to as the "Issuer," (ii) Level 3 Communications, Inc., the parent company, is referred to as "Parent",
(iii) Level 3 Communications, LLC, a direct, wholly owned subsidiary of the Issuer, is referred to as "Level 3 LLC", and (iv) Parent and
its subsidiaries are collectively referred to as "Level 3," unless it is clear from the context or expressly stated that the reference to
"Level 3" is only to Parent.
In this prospectus, any amounts shown on an "as adjusted" basis have been adjusted to reflect, as applicable: (i) the full and
unconditional guarantee of the original notes on an unsecured basis by Level 3 LLC on February 8, 2016; (ii) the issuance by the Issuer
of $775 million aggregate principal amount of its 5.25% Senior Notes due 2026 on March 22, 2016 and (iii) the redemption of all of the
Issuer's $775 million outstanding principal amount of 7% Senior Notes due 2020 with the net proceeds of the 5.25% Senior Notes
Offering (as defined below) and cash on hand which occurred on April 21, 2016.
T he I ssue r
The new notes will be issued by Level 3 Financing, Inc., a direct, wholly owned subsidiary of Parent, in exchange for the original
notes. The Issuer was incorporated in Delaware in 1990. The Issuer is a holding company that holds, directly or indirectly, all of the
outstanding capital stock of virtually all of Parent's other subsidiaries.
Le ve l 3
Level 3 is a facilities-based provider (that is, a provider that owns or leases a substantial portion of the plant, property and
equipment necessary to provide its services) of a broad range of integrated communications services. Level 3 has created its
communications network by constructing its own assets and through a combination of purchasing other companies and purchasing or
leasing facilities from others. Level 3's network is an international, facilities-based communications network. Level 3 designed its
network to provide communications services that employ and take advantage of rapidly improving underlying optical, Internet Protocol,
computing and storage technologies.
Re c e nt De ve lopm e nt s
Issuance of 5.25% Senior Notes due 2026 by the Issuer; Redemption of 7% Senior Notes due 2020 of the Issuer
On March 22, 2016, the Issuer issued $775 million aggregate principal amount of its 5.25% Senior Notes due 2026 (the "5.25%
Senior Notes Offering" and such senior notes, the "5.25% Senior Notes due 2026") in a private offering to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended, and to non U.S. persons outside the United States under
Regulation S under the Securities Act of 1933, as amended. The Issuer's obligations under the 5.25% Senior Notes due 2026 are fully
and unconditionally guaranteed on an unsecured basis by Parent. Each of Parent and the Issuer has agreed to endeavor in good faith
using commercially reasonable efforts to cause Level 3 LLC to obtain all material governmental authorizations and consents required in
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order for it to guarantee the 5.25% Senior Notes due 2026 at the earliest
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practicable date and to enter into a guarantee of those notes promptly thereafter. The net proceeds from the 5.25% Senior Notes
Offering, together with cash on hand, were used to redeem all of the Issuer's $775 million outstanding aggregate principal amount of
7% Senior Notes due 2020. On March 22, 2016, an irrevocable notice of redemption was distributed to holders of the Issuer's 7%
Senior Notes due 2020. The redemption of the outstanding aggregate principal amount of all the 7% Senior Notes due 2020 occurred
on April 21, 2016. Also, on March 22, 2016, the Issuer satisfied and discharged the indenture governing the 7% Senior Notes due
2020. Following the completion of the redemption, $0 in aggregate principal amount of the 7% Senior Notes due 2020 remains
outstanding. See "Description of Indebtedness of Level 3 Communications, Inc. and the Issuer."
Curre nt Orga niza t iona l St ruc t ure of t he I ssue r a nd Pa re nt
The following organizational chart shows a simplified structure of Level 3 as of December 31, 2015, on an as adjusted basis, and
only depicts certain of the Issuer's subsidiaries; for a discussion of the 6.125% Proceeds Note, the 2018 Floating Rate Proceeds Note,
the 5.375% due 2022 Proceeds Note, the 5.625% Proceeds Note, the 5.125% Proceeds Note, the 5.375% due 2025 Proceeds Note,
the 5.25% Proceeds Note, the Offering Proceeds Note, the Loan Proceeds Note and the Parent Intercompany Note (each as defined in
"Summary--The Notes--Offering Proceeds Note; Relative Priority of Intercompany Obligations"), see "Risk Factors--Risks Relating to
the Notes--Although the notes will initially benefit from some structural seniority to Parent's indebtedness, existing and future
intercompany indebtedness and other actions could limit or eliminate this seniority." We refer to the 6.125% Proceeds Note, the 2018
Floating Rate Proceeds Note, the 5.375% due 2022 Proceeds Note, the 5.625% Proceeds Note, the 5.125% Proceeds Note, the
5.375% due 2025 Proceeds Note, the 5.25% Proceeds Note, and the Offering Proceeds Note collectively as the "Existing Proceeds
Notes." We refer to the 6.125% Senior Notes due 2021, the Floating Rate Senior Notes due 2018, the 5.375% Senior Notes due 2022,
the 5.625% Senior Notes due 2023, the 5.125% Senior Notes due 2023 and the 5.375% Senior Notes due 2025 (each as defined in
"Description of Notes--Certain Definitions") and the 5.25% Senior Notes due 2026 (as defined in "Recent Developments") collectively as
the "Existing Senior Notes."
Note: The above corporate structure excludes $199 million in capital leases and other debt both held at subsidiaries of the Issuer. The
above does not show the indebtedness of Level 3
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Communications, Inc. or its other direct subsidiaries. See "Description of Indebtedness of Level 3 Communications, Inc. and the Issuer
--Indebtedness of Level 3 Communications, Inc."
(1)
The Parent Intercompany Note is subordinated to each of the Existing Proceeds Notes. Each of the Existing Proceeds Notes is
subordinated to the Loan Proceeds Note. See "Description of the Notes--Subordination of Existing Intercompany Obligations."
(2)
The Credit Agreement is guaranteed by Parent, Level 3 LLC and certain other subsidiaries of the Issuer.
(3)
The 6.125% Senior Notes due 2021, the Floating Rate Senior Notes due 2018, the 5.375% Senior Notes due 2022, the 5.625%
Senior Notes due 2023, the 5.125% Senior Notes due 2023 and the 5.375% Senior Notes due 2025 and the notes are
guaranteed by Parent and Level 3 LLC. The 5.25% Senior Notes due 2026 are guaranteed by Parent. Each of Parent and the
Issuer has agreed to endeavor in good faith using commercially reasonable efforts to cause Level 3 LLC to obtain all material
governmental authorizations and consents required in order for it to guarantee the 5.25% Senior Notes due 2026 at the earliest
practicable date and to enter into a guarantee of those notes promptly thereafter. Level 3 LLC's guarantees of the 6.125% Senior
Notes due 2021, the Floating Rate Senior Notes due 2018, the 5.375% Senior Notes due 2022, the 5.625% Senior Notes due
2023, the 5.125% Senior Notes due 2023 and the 5.375% Senior Notes due 2025 and the notes are, and any future guarantee
by Level 3 LLC of the 5.25% Senior Notes due 2026 will be, subordinated to Level 3 LLC's guarantee of the Credit Agreement.
See "Description of the Notes--Note Guarantees."
(4)
Each of the Parent Intercompany Note, and each Existing Proceeds Note has been pledged as security for the Credit
Agreement.
(5)
These other subsidiaries are owned at multiple levels.
(6)
The Issuer used the net proceeds from the 5.25% Senior Notes Offering, together with cash on hand, to redeem, and satisfy and
discharge all of the Issuer's outstanding 7% Senior Notes due 2020, including accrued interest, applicable premiums and
expenses. See "Recent Developments--Issuance of 5.25% Senior Notes due 2026; Redemption of 7% Senior Notes due 2020 of
the Issuer."
The Issuer's principal executive offices are located at 1025 Eldorado Boulevard, Broomfield, Colorado 80021 and its telephone
number is (720) 888-1000.
Parent's principal executive offices are located at 1025 Eldorado Boulevard, Broomfield, Colorado 80021 and its telephone number
is (720) 888-1000.
T he Ex c ha nge Offe r
On November 13, 2015, the Issuer privately placed $900,000,000 aggregate principal amount of its 5.375% Senior Notes due
2024 (the "original notes") in a transaction exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"),
and Parent fully and unconditionally guaranteed the original notes on an unsecured basis. On February 8, 2016, pursuant to a
supplemental indenture by and among Parent, Level 3 LLC, the Issuer and The Bank of New York Mellon Trust Company, N.A., as
trustee, Level 3 LLC provided an unconditional, unsecured guarantee of the original notes. In addition, on February 8, 2016, Parent,
Level 3 LLC, the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee, entered into a second supplemental
indenture, pursuant to which Level 3 LLC's guarantee of the original notes is subordinated in any bankruptcy, liquidation or winding-up
proceeding to its guarantee of the Credit Agreement. The proceeds from the issuance of the original notes were used to redeem all of
the
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Issuer's approximately $900 million outstanding aggregate principal amount of 8.625% Senior Notes due 2020, including accrued
interest, applicable premiums and expenses.
In connection with the private placement, the Issuer and Parent entered into a registration agreement, dated as of November 13,
2015, with the initial purchasers of the original notes. In the registration agreement, the Issuer and Parent agreed to register under the
Securities Act an offer of the Issuer's new 5.375% Senior Notes due 2024 which are referred to herein as the "new notes," in exchange
for the original notes. The original notes and the new notes are collectively referred to herein as the "notes." The Issuer and Parent also
agreed to deliver this prospectus to the holders of the original notes. You should read the discussion under the heading "Description of
the Notes" for information regarding the notes.
T he Ex c ha nge Offe r

This is an offer to exchange $1,000 in principal amount of new notes
for each $1,000 in principal amount of outstanding original notes.
The new notes are substantially identical to the original notes, except
that:
(1) the new notes will be freely transferable, other than as
described in this prospectus;
(2) the new notes will not contain any legend restricting their
transfer;
(3) holders of the new notes will not be entitled to the rights of the
holders of the original notes under the registration agreement; and
(4) the new notes will not contain any provisions regarding the
payment of Special Interest (as defined herein).

The Issuer and Parent believe that you can transfer the new notes
without complying with the registration and prospectus delivery
provisions of the Securities Act if you:
(1) acquire the new notes in the ordinary course of your business;
(2) are not and do not intend to become engaged in a distribution
of the new notes;
(3) are not an affiliate of the Issuer;
(4) are not a broker-dealer that acquired the original notes directly
from the Issuer; and
(5) are not a broker-dealer that acquired the original notes as a
result of market-making or other trading activities.

If any of these conditions are not satisfied and you transfer any new
notes without delivering a proper prospectus or without qualifying for
a registration exemption, you may incur liability under the Securities
Act.
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Re gist ra t ion Right s

The Issuer and Parent have agreed to use their commercially
reasonable efforts to consummate the exchange offer or cause the
original notes to be registered under the Securities Act to permit
resales. If the Issuer and Parent are not in compliance with their
obligations under the registration agreement, then Special Interest (in
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addition to the interest otherwise due on the notes that are the
subject of the registration agreement or the new notes) will accrue
on the original notes. If the exchange offer is completed on the terms
and within the time period contemplated by this prospectus, no
Special Interest will be payable on the original notes. See "The
Exchange Offer--Special Interest."

N o M inim um Condit ion
The exchange offer is not conditioned on any minimum aggregate
principal amount of original notes being tendered for exchange.

Ex pira t ion Da t e
The exchange offer will expire at 5:00 p.m., New York City time,
on May 25, 2016, unless it is extended.

Ex c ha nge Da t e
Original notes will be accepted for exchange beginning on the first
business day following the expiration date, upon surrender of the
original notes.

Condit ions t o t he Ex c ha nge
The Issuer's obligation to complete the exchange offer is subject to
Offe r
certain conditions. See "The Exchange Offer--Conditions to the
Exchange Offer." The Issuer reserves the right to terminate or amend
the exchange offer at any time before the expiration date if various
specified events occur.

Wit hdra w a l Right s
You may withdraw the tender of your original notes at any time
before the expiration date. Any original notes not accepted for any
reason will be returned to you without expense as promptly as
practicable after the expiration or termination of the exchange offer.

Proc e dure s for T e nde ring
Origina l N ot e s
See "The Exchange Offer--How to Tender."

M a t e ria l U nit e d St a t e s
The exchange of original notes for new notes by U.S. Holders, as
Fe de ra l I nc om e T a x
defined below, should not be a taxable exchange for U.S. federal
Conside ra t ions
income tax purposes, and U.S. Holders should not recognize any
taxable gain or loss as a result of the exchange. See "Material United
States Federal Income Tax Considerations."
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Effe c t on H olde rs of Origina l
If the exchange offer is completed on the terms and within the period
N ot e s
contemplated by this prospectus, holders of original notes will have
no further registration or other rights under the registration
agreement, except under limited circumstances. Holders of original
notes who do not tender their original notes will continue to hold
those original notes. All untendered, and tendered but unaccepted,
original notes will continue to be subject to the restrictions on transfer
provided for in the original notes and the indenture under which the
original notes have been, and the new notes are being, issued. To
the extent that original notes are tendered and accepted in the
exchange offer, the trading market, if any, for the original notes could
be adversely affected. See "The Exchange Offer--Other."

U se of Proc e e ds
None of the Issuer, Parent or Level 3 LLC will receive any proceeds
from the issuance of the new notes in the exchange offer.

Ex c ha nge Age nt
The Bank of New York Mellon Trust Company, N.A. is serving as
exchange agent in connection with the exchange offer.
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T he N ot e s
The new notes are substantially identical to the original notes, except for the transfer restrictions and registration rights relating to
the original notes. The new notes will evidence the same debt as the original notes, be guaranteed by Parent and Level 3 LLC, and be
entitled to the benefits of the indenture. See "Description of the Notes."
I ssue r

Level 3 Financing, Inc.

Se c urit ie s Offe re d
$900,000,000 aggregate principal amount of new
notes in exchange for $900,000,000 aggregate
principal amount of original notes.

M a t urit y
January 15, 2024.

I nt e re st
Interest on the new notes will accrue at the rate of
5.375% per annum from November 13, 2015 or
from the most recent date to which interest has
been paid, and will be payable in cash
semiannually in arrears on January 15 and July 15
of each year, commencing January 15, 2016, to the
persons who are registered holders of the notes at
the close of business on the preceding January 1
or July 1, as the case may be. Interest will be
computed on the basis of a 360-day year
comprised of twelve 30-day months.

N ot e Gua ra nt e e s
The notes are fully and unconditionally and jointly
and severally guaranteed on an unsubordinated and
unsecured basis by Parent and Level 3 LLC;
provided that Level 3 LLC's
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guarantee of the notes is subordinated to its
guarantee of the Credit Agreement. If the Issuer
cannot make payments on the notes when they are
due, Parent and/or Level 3 LLC must make them
instead.

Offe ring Proc e e ds N ot e ; Re la t ive Priorit y
The Issuer lent the net proceeds received by it from
of I nt e rc om pa ny Obliga t ions
the offering of the original notes, together with cash
on hand, to Level 3 LLC in return for an
intercompany demand note issued by Level 3 LLC
in a principal amount equal to the aggregate
principal amount of the original notes. Such
intercompany demand note is referred to as the
"Offering Proceeds Note."

Level 3 LLC has previously issued an intercompany
demand note to Parent in exchange for loans made
by Parent to Level 3 LLC, which note is referred to
as the "Parent Intercompany Note" and, on an as
adjusted basis, has previously issued intercompany
demand notes to the Issuer in exchange for loans
made by the Issuer to Level 3 LLC: (1) in an
aggregate principal amount of $640 million,
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representing the gross proceeds to the Issuer from
the issuance of its 6.125% Senior Notes due 2021,
which note is referred to as the "6.125% Proceeds
Note"; (2) in an aggregate principal amount of
$300 million, representing the gross proceeds to the
Issuer from the issuance of its Floating Rate Senior
Notes due 2018, which note is referred to as the
"2018 Floating Rate Proceeds Note"; (3) in an
aggregate principal amount of $1.0 billion,
representing the gross proceeds to the Issuer from
the issuance of its 5.375% Senior Notes due 2022,
which note is referred to as the "5.375% due 2022
Proceeds Note"; (4) in an aggregate principal
amount of $500 million, representing the gross
proceeds to the Issuer from the issuance of its
5.625% Senior Notes due 2023, which note is
referred to as the "5.625% Proceeds Note"; (5) in
an aggregate principal amount of $700 million,
representing the gross proceeds to the Issuer from
the issuance of its 5.125% Senior Notes due 2023,
which note is referred to as the "5.125% Proceeds
Note"; (6) in an aggregate principal amount of
$800 million, representing the gross proceeds to the
Issuer from the issuance of its 5.375% Senior Notes
due 2025, which note is
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referred to as the "5.375% due 2025 Proceeds
Note" and (7) in an aggregate principal amount of
$775 million, representing the gross proceeds to the
Issuer from the issuance of its 5.25% Senior Notes
due 2026, which is referred to as the "5.25%
Proceeds Note" (collectively, with the Offering
Proceeds Note, the "Existing Proceeds Notes").

As of December 31, 2015, on an as adjusted basis,
the principal amount outstanding under the Parent
Intercompany Note was approximately $29.0 billion,
the principal amount outstanding under the 6.125%
Proceeds Note was $640 million, the principal
amount outstanding under the 2018 Floating Rate
Proceeds Note was $300 million, the principal
amount outstanding under the 5.375% due 2022
Proceeds Note was $1.0 billion, the principal
amount outstanding under the 5.625% Proceeds
Note was $500 million the principal amount
outstanding under the 5.125% Proceeds Note was
$700 million, the principal amount outstanding
under the 5.375% due 2025 Proceeds Note was
$800 million, the principal amount outstanding
under the 5.25% Proceeds Note was $775 million
and the principal amount outstanding under the
Offering Proceeds Note was $900 million.

Parent, as guarantor, the Issuer, as borrower,
Merrill Lynch Capital Corporation, as administrative
http://www.sec.gov/Archives/edgar/data/794323/000104746916012589/a2228439z424b3.htm[4/27/2016 9:06:26 AM]

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