Subsequent Events

6 Months Ended

Jun. 30, 2011

Subsequent Events

Subsequent Events

(14) Subsequent Events

In July 2011, the Company announced the marketing of a $650 million senior secured term loan.  The proceeds will be used to complete the financings necessary to effect the Global Crossing transaction, and reduced the outstanding senior secured term loan facility commitment to zero.  See Note 2 — Pending Global Crossing Acquisition for further discussion.

On July 15, 2011, certain holders converted approximately $128 million of the Company’s 15% Convertible Senior Notes due in 2013 to common equity.  Upon conversion, the Company issued an aggregate of approximately 71 million shares of Level 3’s common stock, representing the approximately 556 shares per $1,000 note into which the notes were then convertible.  Level 3 also paid an aggregate of $29 million in cash, equivalent to $225 per $1,000 note, representing interest that would have been due from conversion through the maturity date, which will be recognized in the third quarter of 2011 as a loss on inducement. Following the partial conversion of the 15% Convertible Senior Notes, approximately $272 million principal amount of the 15% Convertible Senior Notes due in 2013 remain outstanding.  The 15% Convertible Senior Notes due in 2013 are not callable prior to maturity in January 2013.

In July 2011, Level 3 Escrow issued an additional $600 million aggregate principal amount of its 8.125% Senior Notes due 2019 in a private offering. This offering represented an additional offering of the 8.125% Senior Notes due 2019 that was issued on June 9, 2011 and was treated under the indenture as a single series of notes. The gross proceeds from the offering of the notes were deposited into a segregated escrow account until certain escrow conditions are satisfied, and reduced the outstanding bridge commitment to zero that Level 3 had in place with certain financial institutions in connection with the Global Crossing acquisition. See Note 2 — Pending Global Crossing Acquisition for further discussion.