CenturyLink decides to cancel debt offer for Qwest

CenturyLink (NYSE: CTL) on Monday decided to cancel a tender offer by its Qwest Communications subsidiary and a concurrent public offering of its senior debt securities, a move that was supposed to extend the life and reduce the interest rate of its current debt and pay down debt. 

In a press release, Qwest said it is "terminating the tender offer because it has determined that the financing condition is unlikely to be satisfied."

The Qwest Communications division initially planned to purchase for cash its $800 million of the 7.125 percent notes due in 2018 for $1,069.47 per $1,000 principal amount of notes. The offer would have expired on Oct. 9 at 5 p.m. EST. 

As reported by Dow Jones, CenturyLink was going to use the proceeds from the offering, in addition to available cash or borrowings under its revolving credit facility, to provide Qwest with the funds it needed to complete the offer and redeem on Oct. 26 all $550 million of its 8 percent notes that were due in 2015. Now, Qwest plans to fund this redemption with available funds from CenturyLink's existing revolving credit facility.

J.P. Morgan Securities, LLC and RBC Capital Markets, LLC were the dealer managers for the offer. 

This abandoned offering followed another quarter where CenturyLink, like its fellow ILEC brethren AT&T (NYSE: T) and Verizon (NYSE: VZ) saw strong gains in next-gen IP-based business and consumer services like Ethernet and IPTV amidst ongoing declines in legacy TDM-based voice services. In Q2 2012, CenturyLink reported that net income was $403 million, down from $428 million in Q2 2011.

However, on the business services side, the company's acquisition of the former Savvis, a cloud and data center provider, contributed $278 million of revenue to the company.

For more:
- See the offering release
- And the cancellation release
- Dow Jones has this article

Special report: Wireline in the second quarter of 2012

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