Level 3 Financing sets price talk for 8.5-year sustainability-linked notes

Level 3 Financing Inc. is circulating price guidance in the 3.875% area for its $900 million offering of 8.5-year (non-call three) sustainability-linked notes, sources said. Books for the deal will close today at 1:30 p.m. ET, with final terms expected thereafter via a bookrunner group led by left-lead Morgan Stanley (B&D).

Proceeds of the new deal, along with cash on hand, will be used to redeem all of Level 3's $900 million of 5.375% notes due 2024. Level 3 is part of Lumen Technologies, which announced the offering in a statement today.

Assigned issue ratings are BB/Ba3/BB. The sustainability-linked notes will have a fixed interest rate until 2026, at which point the interest rate payable on the notes will increase by 12.5 basis points unless the company has reached certain sustainability performance targets, according to S&P Global Ratings.

Citi, BofA Securities, Barclays, Goldman Sachs, J.P. Morgan, RBC CM, Wells Fargo, Fifth Third, Mizuho, Toronto Dominion Securities, Truist Securities, Citizens, MUFG, Regions Securities and Deutsche Bank make up the full bookrunning group.

The firm was last seen in the market in August when it placed $840 million of 3.65% unsecured bonds due January 2029, which closed at 99.50 on Friday to give a yield-to-worst of 3.698% according to data compiled by S&P Global Market Intelligence.

In its statement today, Lumen said this was its inaugural offering of notes with sustainability-linked features, adding that they are aligned with its science-based emission-reductions targets and commitment to environmental, social and governance issues.

Lumen Technologies, formerly known as CenturyLink, is a facilities-based telecommunications provider for residential and business customers.