Level 3 Communications to Buy Back Debt

BROOMFIELD, Colo., Oct 11 -- Level 3 Communications Inc. says it plans to spend up to $1.049 billion, or about a third of its available cash, to buy back up to $2.86 billion of its own debt. The company, which incurred about $8 billion of debt to build its network, disclosed the possible cash outlay on its web site. The tender could immediately save the company more than $200 million in annual interest costs.

Level 3 previously said it was prepared to spend as much as $654 million in cash to buy back its debt. Its debt load exceeds its market capitalization by more than 10:1.

The company, which lost $731 million, or $1.99 per share, in its fiscal second quarter, had about $3.16 billion of cash, cash equivalents and marketable securities as of June 30, according to a filing with the Securities and Exchange Commission.