Item 1.01 Entry into a Material Definitive Agreement.
Indenture Related to Issuance of Notes
On January 24, 2020, CenturyLink, Inc. ("CenturyLink") entered into an indenture
(the "Indenture") with Wells Fargo Bank, National Association, as trustee and
notes collateral agent, in connection with CenturyLink's issuance of
$1,250,000,000 aggregate principal amount of its 4.000% Senior Secured Notes due
2027 (the "2027 Notes"). The principal terms of the 2027 Notes are set forth in
CenturyLink received net proceeds from the sale of the 2027 Notes of
approximately $1.236 billion, after deducting fees and offering expenses.
CenturyLink used these net proceeds to repay a portion of its outstanding
indebtedness under its existing 2017 senior secured credit facilities.
The 2027 Notes will mature on February 15, 2027. Interest on the 2027 Notes will
be payable on February 15 and August 15 of each year, beginning on August 15,
The 2027 Notes are unconditionally guaranteed by each of CenturyLink's domestic
subsidiaries (the "Guarantors") that guarantees CenturyLink's 2017 senior
secured credit facilities, subject to the receipt of certain regulatory
approvals and various exceptions and limitations (the "Guarantees"). While the
2027 Notes are not secured by any of the assets of CenturyLink, certain of the
Guarantees are secured by a first priority security interest in substantially
all of the assets of such Guarantors (including the stock of certain of their
respective subsidiaries), which assets also secure obligations under
CenturyLink's 2017 senior secured credit facilities on a pari passu basis.
The 2027 Notes are the senior unsecured obligations of CenturyLink and rank
senior in right of payment to any of its future subordinated debt and rank
equally in right of payment with all of its existing and future unsubordinated
debt. The 2027 Notes are effectively subordinated in right of payment to any of
CenturyLink's existing and future secured indebtedness to the extent of the
value of the assets securing any such indebtedness. The 2027 Notes are
structurally subordinated to all existing and future liabilities of
CenturyLink's subsidiaries that are not guarantors of the 2027 Notes and their
Each of the Guarantees (i) rank equally in right of payment to all existing and
future unsubordinated debt of such Guarantor, (ii) rank senior in right of
payment to all future subordinated debt of such Guarantor, (iii) rank
effectively senior in right of payment to all existing and future indebtedness
of CenturyLink that is not guaranteed by such Guarantor and (iv) are
structurally subordinated to all existing and future liabilities of the
subsidiaries of such Guarantor that are not themselves guarantors of the 2027
Notes. Each of the secured Guarantees are secured by liens on the collateral
described in the Indenture and are effectively senior to all of CenturyLink's
and such Guarantors' existing and future unsecured indebtedness to the extent of
the value of the collateral securing such Guarantee (after giving effect to the
sharing of such value with holders of equal-ranking liens on such collateral).
The 2027 Notes are subject to redemption at the option of CenturyLink, in whole
or in part, at any time or from time to time:
• prior to February 15, 2023, at a redemption price equal to 100% of the
principal amount of 2027 Notes so redeemed plus (i) the applicable
"make-whole" premium set forth in the Indenture and (ii) accrued and
unpaid interest thereon (if any) up to, but not including, the redemption
• on and after February 15, 2023, at redemption prices (expressed as a
percentage of principal amount) equal to (i) 102.000%, for redemptions
between February 15, 2023 and February 14, 2024, (ii) 101.000%, for
redemptions between February 15, 2024 and February 14, 2025, and (iii)
100.00%, for redemptions on or after February 15, 2025; plus in each case
accrued and unpaid interest thereon (if any) up to, but not including, the
In addition, at any time, or from time to time, on or prior to February 15,
2023, CenturyLink may, at its option and subject to certain specified terms and
conditions, redeem up to 40% of the aggregate principal amount of the 2027 Notes
at a redemption price equal to 104.000% of the principal amount of the 2027
Notes so redeemed, plus accrued and unpaid interest thereon (if any) up to, but
not including, the redemption date, with the net cash proceeds from one or more
private placements or underwritten public offerings of common stock of
Upon the occurrence of certain specified change of control events described in
the Indenture, CenturyLink will be required, unless it has elected to redeem the
2027 Notes as described above, to make an offer to repurchase the 2027 Notes at
a price equal to 101% of their aggregate principal amount, plus accrued and
unpaid interest thereon (if any) up to, but not including, the repurchase date.
The Indenture contains various representations and warranties, and affirmative
and negative covenants. Such covenants include, among other things and subject
to certain significant exceptions, restrictions on the ability of CenturyLink
and certain of its subsidiaries to incur priority debt, transfer or dispose of
assets, create liens, issue guarantees and merge or consolidate with any other
The Indenture provides for customary events of default, including, among others,
(i) certain specified failures to make interest, principal or other payments due
under the 2027 Notes; (ii) failure to observe or perform any covenant applicable
to the 2027 Notes for 90 days after written notice with respect thereto by the
trustee or to CenturyLink and the trustee by the holders of at least 30% of the
aggregate principal amount of such 2027 Notes then outstanding; (iii) occurrence
of certain specified events relating to CenturyLink's bankruptcy, insolvency or
reorganization; (iv) certain specified defaults by or judgments against
CenturyLink or certain of its subsidiaries; and (v) certain specified events
impacting the Guarantees or the collateral granted pursuant to the secured
Guarantees. In addition, subject to the terms and conditions set forth in the
Indenture, if an event of default with respect to the 2027 Notes occurs and is
continuing, the trustee or holders of at least 30% of the aggregate principal
amount of the 2027 Notes then outstanding may declare the principal of the 2027
Notes to be due and payable immediately.
The offering of the 2027 Notes was not registered under the Securities Act of
1933, as amended (the "Securities Act"), and the 2027 Notes may not be offered
or sold in the United States absent registration or an exemption from applicable
registration requirements. The 2027 Notes were sold by the initial purchasers to
persons reasonably believed to be "qualified institutional buyers," as defined
in Rule 144A promulgated under the Securities Act, and non-U.S. persons outside
the United States under Regulation S promulgated under the Securities Act. Such
. . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information in Item 1.01 of this Form 8-K is hereby incorporated by
reference into this Item 2.03.
Item 8.01 Other Events.
On January 24, 2020, CenturyLink issued a press release announcing that it had
completed its private placement of the 2027 Notes. That press release is filed
as Exhibit 99.1 to this Current Report and is incorporated by reference into
Except for historical and factual information, the matters set forth in this
Current Report identified by words such as "will," "should," "expects,"
"anticipates," "believes," "plans," "intends," and similar expressions are
forward-looking statements as defined by the federal securities laws, and are
subject to the "safe harbor" protections thereunder. These forward-looking
statements are not guarantees of future results and are based on current
expectations only, and are subject to various uncertainties. Actual events and
results may differ materially from those anticipated by us in those statements.
We may change our intentions or plans discussed in our forward-looking
statements without notice at any time and for any reason.
Item 9.01 Financial Statements and Exhibits.
4.1 Indenture, dated January 24, 2020, between CenturyLink, Inc. and
Wells Fargo Bank, National Association, as trustee and notes
4.2 Form of 2027 Notes (included in Exhibit 4.1).
99.1 Press Release dated January 24, 2020, announcing the completion of
the private placement of the 2027 Notes.
104 Cover Page Interactive Data File (formatted in iXBRL in Exhibit
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