Level 3 Communications Inc. (NASDAQ: LVLT) has registered shares for sale by affiliates of Merrill Lynch (NYSE: MER). This relates to potential offers and sales by Merrill Lynch International of as many as 23 million shares of common stock. Specifically, this is in connection with the early unwind of the bond hedge and warrant Transactions that it entered in December 2004.
All of the shares being offered and sold would be acquired byMerrill Lynch International in the secondary market to hedge itsexposure to the bond hedge and warrant transactions. None of the shares would be acquired from Level 3 itself, and these proposedoffers and sales will not increase the number of shares of Level 3’scommon stock.
In connection with the early unwind of the bond hedge and warrant transactions, Merrill Lynch International agreed to pay Level 3 anamount in cash based on the sale price of Level 3 shares onthe days on which it sells the shares. These were in conjunction with5.25% convertible notes due in 2011 which were issued on November 17,2004.
Merrill Lynch holds over 30.47 million shares prior to this offering,and after the sale will still hold over 7.47 million shares of Level 3stock.
Jon C. Ogg
September 24, 2008