CenturyLink's Embarq to purchase debt for $1.25B

CenturyLink (NYSE: CTL) subsidiary Embarq will pay $1.25 billion to buy back part of its outstanding debt, making it one of the latest service providers to refinance their debt.

Embarq's move follows the same actions taken by fellow regional telco Hawaiian Telcom (Nasdaq: HCOM), a move that will reportedly save it $6 million in annual interest costs.

In the tender offer, Embarq Corp. proposed to repurchase notes that are due in 2013 and 2016 with about $2.5 billion in outstanding principal. Embarq added that if the amount tendered toward its notes due in 2016 exceeds $1 billion, it will only accept those notes for repurchase.

Parent company CenturyLink will use the proceeds from the debt offering it announced on Monday and other money from its revolving credit facility to provide Embarq with the funds to complete the offer.

CenturyLink said it expects to report a Q1 2012 charge from the offer, which will expire at 12:00 midnight ET on March 30.

For more:
- see the release
- Fox Business has this article

Special report: Wireline in the fourth quarter 2011

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