Long-Term Debt

The following table summarizes the Company’s long-term debt (amounts in millions):



	Date of				December 31, 2015		December 31, 2014
	Issuance/Amendment	Maturity	Interest Payments	Interest Rate	Amount		Amount
Senior Secured Term Loans:
Borrowed by Level 3 Financing, Inc.
Tranche B-III 2019 Term Loan ⁽¹⁾⁽⁴⁾	Aug 2013	Aug 2019	Quarterly	LIBOR +3.00%	815		815
Tranche B 2020 Term Loan ⁽¹⁾⁽⁴⁾	Oct 2013	Jan 2020	Quarterly	LIBOR +3.00%	1,796		1,796
Tranche B 2022 Term Loan⁽¹⁾⁽⁴⁾	Oct 2014	Jan 2022	Quarterly	LIBOR +3.50%	—		2,000
Tranche B-II 2022 Term Loan⁽¹⁾⁽⁴⁾	May 2015	May 2022	Quarterly	LIBOR +2.75%	2,000		—
Senior Notes:
Issued by Level 3 Financing, Inc.
Floating Rate Senior Notes due 2018 ⁽²⁾⁽⁴⁾	Nov 2013	Jan 2018	May/Nov	6-Month LIBOR +3.50%	300		300
9.375% Senior Notes due 2019 ⁽²⁾	Mar 2011	Apr 2019	Apr/Oct	9.375%	—		500
8.125% Senior Notes due 2019 ⁽²⁾	Jul 2011	Jul 2019	Jan/Jul	8.125%	—		1,200
8.625% Senior Notes due 2020⁽²⁾	Jan 2012	Jul 2020	Jan/Jul	8.625%	—		900
7% Senior Notes due 2020 ⁽²⁾	Aug 2012	Jun 2020	Jun/Dec	7.000%	775		775
6.125% Senior Notes due 2021 ⁽²⁾	Nov 2013	Jan 2021	Apr/Oct	6.125%	640		640
5.375% Senior Notes due 2022⁽²⁾	Aug 2014	Aug 2022	May/Nov	5.375%	1,000		1,000
5.625% Senior Notes due 2023 ⁽²⁾	Jan 2015	Feb 2023	Jun/Dec	5.625%	500		—
5.125% Senior Notes due 2023⁽²⁾	Apr 2015	May 2023	Mar/Sept	5.125%	700		—
5.375% Senior Notes due 2025 ⁽²⁾	Apr 2015	May 2025	Mar/Sept	5.375%	800		—
5.375% Senior Notes due 2024 ⁽²⁾	Nov 2015	Jan 2024	Jan/Jul	5.375%	900		—
Issued by Level 3 Communications, Inc.
8.875% Senior Notes due 2019 ⁽³⁾	Aug 2012	Jun 2019	Jun/Dec	8.875%	—		300
5.75% Senior Notes due 2022⁽³⁾	Dec 2014	Dec 2022	Mar/Sept	5.750%	600		600
7% Convertible Senior Notes Due 2015 ⁽³⁾	Jun 2009	Mar 2015	Mar/Sept	7.000%	—		58
7% Convertible Senior Notes Due 2015 Series B ⁽³⁾	Oct 2009	Mar 2015	Mar/Sept	7.000%	—		275
Capital Leases and Other Debt					199		207
Total Debt Obligations					11,025		11,366
Unamortized discounts					(16	)	(33	)
Current Portion					(15	)	(349	)
Total Long-Term Debt					10,994		10,984

⁽¹⁾ The term loans are secured obligations and guaranteed by the Company and Level 3 Communications, LLC and certain other subsidiaries.

⁽²⁾ The notes are fully and unconditionally guaranteed on an unsubordinated unsecured basis by the Company and Level 3 Communications, LLC.

⁽³⁾The notes were not guaranteed by any of the Company’s subsidiaries.

⁽⁴⁾The Tranche B-III 2019 Term Loan and the Tranche B 2020 Term Loan each had an interest rate of 4.000% as of December 31, 2015 and 2014. The Tranche B-II 2022 Term Loan had an interest rate of 3.500% as of December 31, 2015 and the Tranche B 2022 Term Loan had an interest rate of 4.500% as of December 31, 2014. The Floating Rate Senior Notes due 2018 had an interest rate of 4.101% as of December 31, 2015 and 3.826% as of December 31, 2014. The interest rate on the Tranche B-III 2019 Term Loan, the Tranche B 2020 Term Loan and the Tranche B 2022 Term Loan are set with a minimum LIBOR of 1.00%, and the Tranche B-II 2022 Term Loan is set with a minimum LIBOR of 0.75%.

Senior Secured Term Loans

As of January 1, 2014, Level 3 Financing, Inc., the Company's direct wholly owned subsidiary ("Level 3 Financing") had a senior credit facility consisting of $815 million Tranche B-III Term Loan due 2019 and $1.796 billion Tranche B Term Loan due 2020.

On October 31, 2014, Level 3 Financing entered into a ninth amendment agreement to the Existing Credit Agreement to incur $2 billion in aggregate borrowings under the Existing Credit Agreement through the creation of a new Tranche B 2022 Term Loan (the "Tranche B 2022 Term Loan"). The Tranche B 2022 Term Loan included an upfront payment to the lenders of 0.75% of par and bears interest equal to LIBOR plus 3.50% with LIBOR set at a minimum of 1.00%.

On May 8, 2015, Level 3 Financing refinanced its existing $2 billion senior secured Tranche B 2022 Term Loan under a tenth amendment agreement to its Existing Credit Agreement through the creation of a new senior secured Tranche B-II 2022 term loan in the aggregate principal amount of $2 billion (the "Tranche B-II 2022 Term Loan"). The Tranche B-II 2022 Term Loan has an interest rate of LIBOR plus 2.75%, with a minimum LIBOR of 0.75%, and will mature on May 31, 2022. The Tranche B-II 2022 Term Loan was priced to lenders at par, with the payment to the lenders of an upfront fee of 25 basis points at closing. As a result of this transaction, the Company recognized a loss on the refinancing of approximately $27 million.

Senior Notes

The Company completed several offerings and refinancing of senior notes in 2015 and 2014. All of the notes pay interest semiannually, and allow for the redemption of the notes at the option of the issuer upon not less than 30 or more than 60 days’ prior notice by paying the greater of the principal amount or a “make-whole” amount, plus accrued interest. In addition, the following notes also have a provision that allows for an additional right of optional redemption using cash proceeds received from the sale of equity securities. For specific details of these features and requirements, including the applicable premiums and timing, refer to the indentures for the respective senior notes in connection with the original issuances.

5.375% Senior Notes due 2022

On August 12, 2014, Level 3 Escrow II, Inc. (“Level 3 Escrow”), an indirect, wholly owned subsidiary of Level 3 Communications, Inc., issued $1.0 billion in aggregate principal amount of its 5.375% Senior Notes due 2022 (the “5.375% Senior Notes due 2022”). The 5.375% Senior Notes due 2022 were assumed by Level 3 Financing and the proceeds were used to refinance certain existing indebtedness of tw telecom.

5.75% Senior Notes due 2022

On December 1, 2014, Level 3 issued a total of $600 million aggregate principal amount of its 5.75% Senior Notes due 2022 (the “5.75% Senior Notes”). The net proceeds from the offering of the notes, together with cash on hand were used to redeem all of the outstanding 11.875% Senior Notes due 2019 issued by Level 3 Financing, including the payment of accrued interest and applicable premiums, and in connection with that redemption, the indenture relating to the 11.875% Senior Notes due 2019 was discharged on December 31, 2014. Level 3 Financing redeemed its 11.875% Senior Notes due 2017 at a price of 106.859% of the principal amount and recognized a loss on extinguishment of debt of $53 million.

9.375% Senior Notes due 2019 and 5.625% Senior Notes due 2023

In January 2015, Level 3 Financing issued $500 million in aggregate principal amount of its 5.625% Senior Notes due 2023 (the “5.625% Senior Notes”). The net proceeds from the offering of the 5.625% Senior Notes, together with cash on hand, were used to redeem, on April 1, 2015, all of Level 3 Financing’s approximately $500 million aggregate principal amount of 9.375% Senior Notes due 2019, including accrued interest, applicable premiums and expenses. Total loss on extinguishment of debt related to the 9.375% Senior Notes due 2019 was $36 million.

8.125% Senior Notes due 2019, 8.875% Senior Notes due 2019, 5.125% Senior Notes due 2023 and 5.375% Senior Notes due 2025

In April 2015, Level 3 Financing issued $700 million in aggregate principal amount of its 5.125% Senior Notes due 2023 (the “5.125% Senior Notes”) and $800 million in aggregate principal amount of its 5.375% Senior Notes due 2025 (the “5.375% Senior Notes due 2025”). The net proceeds from the offering of the 5.125% Senior Notes and 5.375% Senior Notes due 2025, together with cash on hand, were used to redeem all $1.2 billion aggregate principal amount of Level 3 Financing’s 8.125% Senior Notes due 2019 and all $300 million aggregate principal amount of the Company's 8.875% Senior Notes due 2019. Total loss on extinguishment of debt related to the 8.125% Senior Notes due 2019 was $82 million and total loss on extinguishment of debt related to the 8.875% Senior Notes due 2019 was $18 million.

The 5.125% Senior Notes and 5.375% Senior Notes due 2025 were not originally registered under the Securities Act of 1933, as amended. The registration rights agreement became effective as of December 10, 2015.

8.625% Senior Notes due 2020 and 5.375% Senior Notes due 2024

On November 13, 2015, Level 3 Financing issued $900 million in aggregate principal amount of its 5.375% Senior Notes due 2024 (the “5.375% Senior Notes due 2024”). The net proceeds from the offering of the 5.375% Senior Notes due 2014, together with cash on hand, were used to redeem all $900 million aggregate principal amount of Level 3 Financing’s 8.625% Senior Notes due 2020. Total loss on modification and extinguishment of debt related to the 8.625% Senior Notes due 2020 was approximately $55 million.

The 5.375% Senior Notes due 2024 are fully and unconditionally guaranteed on an unsubordinated unsecured basis by the Company and now Level 3 Communications, LLC as of February 2016.

7% Convertible Senior Notes

During the fourth quarter of 2014, certain holders converted approximately $142 million of the 7% Convertible Senior Notes to common equity. Upon conversion, the Company issued an aggregate of approximately 5 million shares of Level 3 common stock, representing the approximately 37 shares per $1,000 note into which the notes were then convertible.

During the first quarter of 2015, holders converted the remaining $333 million aggregate principal amount of the Level 3's 7% Convertible Senior Notes due 2015 to common equity. Upon conversion, the Company issued an aggregate of approximately 12 million shares of Level 3 common stock, representing the approximately 37 shares per $1,000 note into which the notes were then convertible.

Capital Leases

As of December 31, 2015, the Company had $199 million of capital leases. The Company leases property, equipment, certain dark fiber facilities and metro fiber under non-cancelable IRU agreements that are accounted for as capital leases. Interest rates on these capital leases approximated 5.9% on average as of December 31, 2015.

Other Debt

As of December 31, 2015, the Company had less than $1 million of other debt with an average interest rate of 5.0%.

Debt Issuance Costs

For the years ended December 31, 2015, 2014 and 2013, the Company deferred debt issuance costs of $50 million, $49 million and $27 million, respectively, in connection with debt issuances, that are being amortized to interest expense over the respective terms of the debt. At December 31, 2015 and 2014, there was $128 million and $145 million, respectively, of unamortized debt issuance costs.

Covenant Compliance

At December 31, 2015 and 2014, the Company was in compliance with the financial covenants on all outstanding debt issuances.

Long-Term Debt Maturities

Aggregate future contractual maturities of long-term debt and capital leases (excluding discounts and fair value adjustments) were as follows as of December 31, 2015 (dollars in millions):



2016	$	15
2017	7
2018	307
2019	822
2020	2,579
Thereafter	7,295
	$	11,025