Long-Term Debt and Credit Facilities

3 Months Ended

Mar. 31, 2020

The following chart reflects the consolidated long-term debt of CenturyLink, Inc. and its subsidiaries, including unamortized discounts and premiums and unamortized debt issuance costs, but excluding intercompany debt:



	Interest Rates⁽¹⁾	Maturities	March 31, 2020			December 31, 2019
			(Dollars in millions)
Senior Secured Debt: ⁽²⁾
CenturyLink, Inc.
2017 Revolving Credit Facility ⁽³⁾	2.889%	2025	$	1,375		250
Term Loan A ⁽³⁾⁽⁴⁾	LIBOR + 2.00%	2025	1,152			1,536
Term Loan A-1 ⁽³⁾⁽⁴⁾	LIBOR + 2.00%	2025	329			333
Term Loan B ⁽³⁾⁽⁵⁾	LIBOR + 2.25%	2027	4,987			5,880
Senior note	4.000%	2027	1,250			—
Subsidiaries:
Level 3 Financing, Inc.
Tranche B 2027 Term Loan ⁽⁶⁾	LIBOR + 1.75%	2027	3,111			3,111
Senior notes	3.400% - 3.875%	2027 - 2029	1,500			1,500
Embarq Corporation subsidiaries
First mortgage bonds	7.125% - 8.375%	2023 - 2025	138			138
Senior Notes and Other Debt:
CenturyLink, Inc.
Senior notes	5.125% - 7.650%	2020 - 2042	8,618			8,696
Subsidiaries:
Level 3 Financing, Inc.
Senior notes	4.625% - 5.625%	2022 - 2027	5,515			5,515
Qwest Corporation
Senior notes	6.125% - 7.750%	2021 - 2057	4,856			5,956
Term Loan ⁽⁷⁾	LIBOR + 2.00%	2025	100			100
Qwest Capital Funding, Inc.
Senior notes	6.875% - 7.750%	2021 - 2031	352			352
Embarq Corporation and subsidiary
Senior note	7.995%	2036	1,437			1,450
Finance lease and other obligations	Various	Various	205			222
Unamortized discounts, net			(45		)	(52	)
Unamortized debt issuance costs			(270		)	(293	)
Total long-term debt			34,610			34,694
Less current maturities ⁽⁸⁾			(1,129		)	(2,300	)
Long-term debt, excluding current maturities			$	33,481		32,394

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(1)	As ofMarch 31, 2020.


(2)	See Note 7—Long-Term Debt and Credit Facilities in our Annual Report on Form 10-K for the year ended December 31, 2019 for a description of certain parent or subsidiary guarantees and liens securing this debt.


(3)	CenturyLink's credit agreement was amended as noted below, extending the maturity date of its (a) Term Loan A, Term Loan A-1 and Revolving Credit Facilities from 2022 to 2025 and (b) Term Loan B from 2025 to 2027.


(4)	Term Loans A and A-1 had interest rates of 2.989% and 4.549% as of March 31, 2020 and December 31, 2019, respectively.


(5)	Term Loan B had interest rates of 3.239% and 4.549% as of March 31, 2020 and December 31, 2019, respectively.


(6)	The Tranche B 2027 Term Loan had an interest rate of 2.739% as of March 31, 2020 and 3.549% as of December 31, 2019, respectively.


(7)	Qwest Corporation Term Loan had an interest rate of 2.990% as of March 31, 2020 and 3.800% as of December 31, 2019, respectively.


(8)	See "Subsequent Event" for further details on the April 1, 2020 redemption of $973 million of senior unsecured notes.

Long-Term Debt Maturities

Set forth below is the aggregate principal amount of our long-term debt (excluding unamortized discounts, net and unamortized debt issuance costs) maturing during the following years as of March 31, 2020:



	(Dollars in millions)
2020 (remaining nine months) ⁽¹⁾	$	1,094
2021	2,419
2022	2,377
2023	2,160
2024	2,037
2024 and thereafter	24,838
Total long-term debt	$	34,925

______________________________________________________________________


(1)	See "—Subsequent Events" below.

Amended and Restated Credit Agreement

On January 31, 2020, CenturyLink, Inc. amended and restated its credit agreement dated June 19, 2017 (as so amended and restated, the “Amended Credit Agreement”). Coupled with CenturyLink’s prepayment on January 24, 2020 of $1.25 billion of indebtedness outstanding under its Term Loan B facility (using principally the net proceeds from its below-described sale the same day of $1.25 billion of its 4.000% Senior Secured Notes due 2027), the Amended Credit Agreement currently provides for approximately $8.699 billion in senior secured credit facilities, consisting of an approximately $1.166 billion Term Loan A credit facility, a $333 million Term Loan A-1 credit facility, a $5.0 billion Term Loan B credit facility and a $2.2 billion revolving credit facility (collectively, the “Amended Senior Secured Credit Facilities”).

The Amended Credit Agreement, among other things, (i) extended the maturity date of (a) the Term Loan A, Term Loan A-1 and Revolving Credit facilities from November 1, 2022 to January 31, 2025 and (b) the Term Loan B facility from January 31, 2025 to March 15, 2027, and (ii) lowered the interest rate applicable to loans made under each of the Amended Senior Secured Credit Facilities. As so amended, (i) loans under the Term Loan A, Term Loan A-1 and Revolving Credit facilities will bear interest at a rate equal to, at CenturyLink’s option, the Eurodollar rate or the alternative base rate (each as defined in the Amended Credit Agreement) plus an applicable margin between 1.50% to 2.25% per annum for Eurodollar loans and 0.50% to 1.25% per annum for alternative base rate loans, depending on CenturyLink’s then current total leverage ratio, and (ii) loans under the Term Loan B facility will bear interest at the rate equal to, at CenturyLink’s option, the Eurodollar rate plus 2.25% per annum or the alternative base rate plus 1.25% per annum. The subsidiary guarantor and collateral provisions and the financial covenants contained in the Amended Credit Agreement are unchanged from the credit agreement dated June 19, 2017.

These January 2020 transactions resulted in an aggregate net loss of $67 million from modification and extinguishment of the debt.

Repayments

During the three months ended March 31, 2020, CenturyLink and its affiliates repurchased approximately $2.4 billion of their respective debt securities, which primarily included $1.25 billion of CenturyLink, Inc. credit agreement debt, $1.1 billion of Qwest Corporation senior notes and $78 million of CenturyLink, Inc. senior notes, which resulted in a loss of $79 million, including the modification of the Amended Credit Agreement discussed above. Additionally, during the period CenturyLink paid $31 million of amortization payments under its term loans.

New Issuance

On January 24, 2020, CenturyLink issued $1.25 billion aggregate principal amount of its 4.000% Senior Secured Notes due 2027 (the “2027 Notes”). As noted above, CenturyLink used the net proceeds from this offering to repay a portion of the outstanding indebtedness under its Term Loan B facility. The 2027 Notes are unconditionally guaranteed by each of CenturyLink's domestic subsidiaries that guarantee CenturyLink's Amended Credit Agreement, subject to the receipt of certain regulatory approvals and various exceptions and limitations. While the 2027 Notes are not secured by any of the assets of CenturyLink, certain of the note 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 the Amended Credit Agreement on a pari passu basis.

Covenants

Certain of our debt instruments contain affirmative and negative covenants. Debt at CenturyLink, Inc. and Level 3 Financing, Inc. contain more extensive covenants including, among other things and subject to certain exceptions, restrictions on their ability to declare or pay dividends, repay certain other indebtedness, create liens, incur additional indebtedness, make investments, engage in transactions with their affiliates, dispose of assets and merge or consolidate with any other person. Also, CenturyLink, Inc. and certain of its affiliates will be required to offer to purchase certain of their respective outstanding debt under certain circumstances in connection with certain specified "change of control" transactions.

Certain of our debt instruments contain cross acceleration provisions.

Compliance

As of March 31, 2020, CenturyLink, Inc. believes it and its subsidiaries were in compliance with the provisions and financial covenants in their respective material debt agreements in all material respects.

Subsequent Event

On April 1, 2020, we paid at maturity $973 million aggregate principal amount of CenturyLink's outstanding senior notes, utilizing cash borrowed late in the first quarter of 2020 under our revolving credit facility.