Level 3 Communications, Inc. (Nasdaq:LVLT) announced today that it has repaid in full the $1.125 billion of purchase money debt obligations outstandin...

Level 3 Communications, Inc. (Nasdaq:LVLT) announced today that it has repaid in full the $1.125 billion of purchase money debt obligations outstanding under its senior secured credit facility. As a result, the senior secured credit facility has been terminated.

Level 3 repaid the senior secured credit facility with proceeds from the recently completed private offering of Senior Notes by its subsidiary, along with restricted cash of $400 million and approximately $243 million of unrestricted cash on hand.

In connection with the repayment of the senior secured credit facility, Level 3 has decreased consolidated long-term debt by $625 million and reduced its consolidated annual interest expense. Additionally, as a result of the termination, covenants contained in the senior secured credit facility have been eliminated, and the first significant maturities on the company’s outstanding long-term debt now begin in 2008.

Pro forma for these transactions and the issuance of approximately $374 million of Senior Convertible Notes in July 2003, Level 3 had approximately $1.2 billion in cash on hand, including $150 million of restricted cash, at the end of the second quarter 2003.

Reconciliation to Cash Balance
($ in millions) June 30, 2003
Cash, Cash Equivalents and Restricted Cash (1) $1,458
Net proceeds from 2.875% Convertible Senior Notes due 2010 (2) $362
Net proceeds from 10.75% Senior Notes due 2011 (3) $487
Less payment in full of senior secured credit facility (4) ($1,125)
Less prepayment fee on senior secured credit facility ($4)

Pro Forma Cash, Cash Equivalents and Restricted Cash (1) $1,178
(1) Includes restricted cash of $543 million as of June 30, 2003 and restricted cash of $150 million pro forma.
(2) $373.5 million aggregate principal amount of 2.875% Convertible Senior Notes issued July 2003.
(3) $500 million aggregate principal amount of 10.75% Senior Notes issued October 2003.
(4) Represents purchase money indebtedness.

The senior notes have not been registered under the Securities Act of 1933 or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws. This press release is not an offer of the senior notes for sale in the United States.


About Level 3 Communications:
Level 3 (Nasdaq:LVLT) is an international communications and information services company. The company operates one of the largest Internet backbones in the world, is one of the largest providers of wholesale dial-up service to ISPs in North America and is the primary provider of Internet connectivity for millions of broadband subscribers, through its cable and DSL partners. The company offers a wide range of communications services over its 22,500 mile broadband fiber optic network including Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, and patented
Softswitch managed modem and voice services.

For more information on Level3, please visit: www.Level3.com