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Level 3 Financing prices sustainability-linked notes to yield 3.75%; terms

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Level 3 Financing prices sustainability-linked notes to yield 3.75%; terms

Level 3 Financing Inc. has priced $900 million of 8.5-year sustainability-linked notes at the tight end of guidance, sources said. Morgan Stanley was lead bookrunner for the offering.

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.

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.

Level 3 is part of Lumen Technologies, formerly known as CenturyLink, a facilities-based telecommunications provider for residential and business customers. In a statement today, Lumen said this was its inaugural offering of notes with sustainability-linked features, adding that they are aligned with its science-based emissions-reduction targets and commitment to environmental, social and governance issues. Terms:

Issuer Level 3 Financing Inc.
Ratings BB/Ba3
Amount $900 million
Issue Sustainability-linked senior notes (144A/Reg S for life)
Coupon 3.75%
Price 100
Yield 3.75%
Spread T+278
Maturity July 15, 2029
Call Non-call three (first call at par plus 50% coupon)
Trade (date) Jan. 11, 2021
Settle Jan. 13, 2021 (T+2)
Bookrunners MS (left lead, B&D)/C/BofA/Barc/CS/GS/ JPM/RBC/WF/FifthThird/Mizuho/TD/Truist/Citizens/MUFG/Regions/DB
Px talk 3.875% area
Notes Make-whole at T+50; up-to-40% equity claw at 103.75% until Jan. 15, 2024