Long-Term Debt and Credit Facilities

Long-term debt, including unamortized discounts and premiums and unamortized debt issuance costs, consisting of borrowings by CenturyLink, Inc. and certain of its subsidiaries, including CenturyLink Escrow, LLC, Qwest Corporation, Qwest Capital Funding, Inc. and Embarq Corporation and its subsidiaries ("Embarq"), were as follows:



	Interest Rates	Maturities	As of September 30, 2017			As of December 31, 2016
			(Dollars in millions)
CenturyLink, Inc.
Senior notes	5.625% - 7.650%	2019 - 2042	$	8,125		8,975
2012 credit facility and revolving line of credit⁽¹⁾	—	2019	—			370
2012 term loan	2.990%	2019	319			336
Subsidiaries
CenturyLink Escrow, LLC
Term loan B⁽²⁾	2.75%	2025	6,000			—
Qwest Corporation
Senior notes	6.125% - 7.750%	2021 - 2057	7,294			7,259
Term loan	2.990%	2025	100			100
Qwest Capital Funding, Inc.
Senior notes	6.500% - 7.750%	2018 - 2031	981			981
Embarq Corporation and subsidiaries
Senior note	7.995%	2036	1,485			1,485
First mortgage bonds	7.125% - 8.770%	2019 - 2025	151			223
Other	9.000%	2019	150			150
Capital lease and other obligations⁽³⁾	Various	Various	740			440
Unamortized discounts, net			(164		)	(133	)
Unamortized debt issuance costs			(203		)	(193	)
Total long-term debt			24,978			19,993
Less current maturities not associated with assets held for sale			(124		)	(1,503	)
Less capital lease obligations associated with assets held for sale			—			(305	)
Long-term debt, excluding current maturities and capital leases obligations associated with assets held for sale			$	24,854		18,185

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⁽¹⁾

The aggregate amount outstanding on our 2012 credit facility and revolving line of credit borrowings at December 31, 2016 was $370 million with a weighted-average interest rate of 4.500%. At September 30, 2017, we had no borrowings outstanding under our 2012 credit facility and revolving line of credit. These amounts change on a regular basis. As described under "2017 Credit Agreement" below, we discharged and terminated our 2012 credit facility on November 1, 2017.


⁽²⁾	Represents the fixed rate and the obligor in effect at September 30, 2017. Please see "2017 Credit Agreement" for further information on our term loans and revolving credit facility under our June 19, 2017 credit agreement.

⁽³⁾

As a result of not meeting the sale leaseback accounting requirements, we must treat a certain amount of the pre-tax cash proceeds from the sale of our real estate assets as though it were the result of a financing obligation on our consolidated balance sheet. Also, the capital lease obligations that were shown as held for sale as of December 31, 2016 are retained and revalued. Please see Note 3—Sale of Data Centers and Colocation Business for additional information on our most current estimate of the financing obligation.

New Issuances

On April 27, 2017, Qwest Corporation issued $575 million aggregate principal amount of 6.75% Notes due 2057 and, on May 5, 2017, issued an additional $85 million aggregate principal amount of such notes pursuant to an over-allotment option in exchange for aggregate net proceeds, after deducting underwriting discounts and other expenses, of $638 million. All of the 6.75% Notes are senior unsecured obligations and may be redeemed by Qwest Corporation, in whole or in part, on or after June 15, 2022, at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.

Repayments

On August 1, 2017, subsidiaries of Embarq Corporation paid at maturity the $72 million principal amount and accrued and unpaid interest due under their 8.77% Notes.

On June 15, 2017, CenturyLink, Inc. paid at maturity the $350 million principal and accrued and unpaid interest due under its 5.15% Notes.

On May 9, 2017, Qwest Corporation redeemed $125 million aggregate principal amount of the remaining $288 million of its 7.5% Notes due 2051, which resulted in an immaterial loss.

On May 4, 2017, Qwest Corporation redeemed all $500 million of its 6.5% Notes due 2017, which resulted in an immaterial loss.

On April 3, 2017, CenturyLink, Inc. paid at maturity the $500 million principal and accrued and unpaid interest due under its 6.00% Notes.

2017 Credit Agreement

As further described in Note 2—Acquisition of Level 3, we completed our acquisition of Level 3 on November 1, 2017. To finance a substantial portion of our acquisition of Level 3, on June 19, 2017, we caused our wholly-owned subsidiary, CenturyLink Escrow, LLC (the "Escrow Borrower"), to enter into a credit agreement (the "Credit Agreement") with, among others, Bank of America, N.A., as administrative agent and collateral agent, providing for $9.945 billion in senior secured credit facilities (the "New Senior Secured Credit Facilities"). These facilities consist of:


•	a $2 billion revolving credit facility (“the New Revolving Credit Facility”), which has 18 lenders, each with commitments ranging from $32.8 million to $167.8 million, which we initially drew upon on November 1, 2017;


•	a $1.575 billion senior secured Term Loan A credit facility, which has 17 lenders, each with commitments ranging from $28.6 million to $132.2 million, which we drew in full on November 1, 2017;


•	a $370 million senior secured Term Loan A-1 credit facility with CoBank, ACB, which we drew in full on November 1, 2017; and


•	a $6 billion senior secured Term Loan B credit facility, the proceeds of which were fully pre-funded less a discount into escrow on June 19, 2017 and released to us on November 1, 2017. These escrowed debt proceeds, together with pre-funded amounts in escrow to cover interest payments, are reflected as "restricted cash" in our consolidated balance sheet as of September 30, 2017.

We used the proceeds of borrowings under the New Senior Secured Credit Facilities, together with other available funds (including amounts received from Level 3), (i) to fund the cash portion of the consideration and transaction costs payable in connection with the Level 3 acquisition and (ii) to repay all indebtedness outstanding under our 2012 term loan, and we terminated our 2012 credit facility, the revolving line of credit and our 2012 term loan. The New Revolving Credit Facility and borrowings under the Term Loan A and A-1 facilities will mature on November 1, 2022. Borrowings under the Term Loan B facility will mature on January 31, 2025.

By virtue of merging the Escrow Borrower into CenturyLink, Inc. on November 1, 2017, CenturyLink, Inc. assumed all rights and obligations under the Credit Agreement, including the right to borrow funds under the New Revolving Credit Facility on the terms and conditions specified in the Credit Agreement.

Loans under the Term Loan A and A-1 facilities and the New Revolving Credit Facility bear interest at a rate equal to, at our option, the London Interbank Offered Rate (“LIBOR”) or the alternative base rate (each as defined in the Credit Agreement) plus an applicable margin between 2.25% to 3.00% per annum for LIBOR loans and 1.25% to 2.00% per annum for alternative base rate loans, depending on our then current total leverage ratio. Borrowings under the Term Loan B facility bore interest at 1.375% per annum between June 19, 2017 and July 18, 2017, at 2.75% per annum from July 19, 2017 through the date of closing of the Level 3 acquisition and will bear interest of LIBOR plus 2.75% per annum thereafter. Loans under each of the term loan facilities require certain specified quarterly amortization payments and certain specified mandatory prepayments in connection with certain asset sales and debt issuances and out of excess cash flow, among other things, subject in each case to certain significant exceptions.

All of our obligations under the New Senior Secured Credit Facilities are guaranteed by certain of our subsidiaries. The guarantees by certain of those guarantors are secured by a first priority security interest in substantially all assets (including certain subsidiaries' stock) directly owned by them, subject to certain exceptions and limitations.

The New Revolving Credit Facility replaced our 2012 revolving credit facility. A portion of the New Revolving Credit Facility in an amount not to exceed $100 million is available for swingline loans and a portion in an amount not to exceed $400 million is available for the issuance of letters of credit. On November 1, 2017, we discharged our 2012 term loan scheduled to mature in 2019 and entered into Term Loan A-1 with the same lender. On such date, we also paid certain specified financing fees totaling $239 million under the New Senior Secured Credit Facilities.

With respect to the Term Loan A and A-1 facilities and the New Revolving Credit Facility, the Credit Agreement requires us to maintain (i) a maximum total leverage ratio of not more than 5.00 to 1.00 between the closing date of the Level 3 acquisition and the second anniversary thereof and 4.75 to 1.00 thereafter and (ii) a minimum consolidated interest coverage ratio of at least 2.00 to 1.00, with such ratios being determined and calculated in the manner described in the Credit Agreement.

The New Senior Secured Credit Facilities contain various representations and warranties and affirmative and negative covenants. Such covenants include, among other things and subject to certain significant exceptions, restrictions on our ability to declare or pay dividends, repurchase stock, repay certain other indebtedness, create liens, incur additional indebtedness, make investments, engage in transactions with its affiliates, dispose of assets and merge or consolidate with any other person.

Covenants

As of September 30, 2017, we believe we were in compliance with the provisions and covenants contained in our 2012 revolving credit facility, Credit Agreement and other material debt agreements.

Level 3 Debt

Level 3 and its financing subsidiary are indebted under certain senior notes and term loans, all of which contain various affirmative and negative covenants. Additional information about this indebtedness can be found elsewhere herein and in Level 3's filings with the SEC.