Long-Term Debt

The following chart reflects our consolidated long-term debt, including unamortized discounts, premiums and debt issuance costs, but excluding intercompany debt:



			Successor			Predecessor
	Interest Rates	Maturities	December 31, 2017			December 31, 2016
			(Dollars in millions)
Level 3 Parent, LLC
5.750% Senior Notes due 2022⁽³⁾	5.750%	2022	$	600		600
Subsidiaries
Level 3 Financing, Inc.
Senior Notes:
Floating Rate Senior Notes due 2018 ⁽²⁾⁽⁴⁾	6-Month LIBOR + 3.50%	2018	—			300
6.125% Senior Notes due 2021 ⁽²⁾	6.125%	2021	640			640
5.375% Senior Notes due 2022⁽²⁾	5.375%	2022	1,000			1,000
5.625% Senior Notes due 2023 ⁽²⁾	5.625%	2023	500			500
5.125% Senior Notes due 2023⁽²⁾	5.125%	2023	700			700
5.375% Senior Notes due 2025 ⁽²⁾	5.375%	2025	800			800
5.375% Senior Notes due 2024 ⁽²⁾	5.375%	2024	900			900
5.25% Senior Notes due 2026 ⁽²⁾	5.250%	2026	775			775
Term Loans:
Tranche B-III 2019 Term Loan ⁽¹⁾⁽⁴⁾	LIBOR + 3.00%	2019	—			815
Tranche B 2020 Term Loan⁽¹⁾⁽⁴⁾	LIBOR + 3.00%	2020	—			1,796
Tranche B-II 2022 Term Loan⁽¹⁾⁽⁴⁾	LIBOR + 2.75%	2022	—			2,000
Tranche B 2024 Term Loan⁽⁴⁾⁽⁵⁾	LIBOR + 2.25%	2024	4,611			—
Capital Leases and other debt	Various	Various	179			183
Unamortized premiums (discounts), net			185			(13	)
Unamortized debt issuance costs			—			(112	)
Total long-term debt			10,890			10,884
Less current maturities			(8		)	(7	)
Long-term debt, excluding current maturities			$	10,882		10,877

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

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

(3) The notes are not guaranteed by any of Level 3 Parent, LLC's subsidiaries.

(4) The Tranche B 2024 Term Loan had an interest rate of 3.557% as of December 31, 2017. All other term loans were refinanced on February 22, 2017 as described below. The Tranche B-III 2019 Term Loan and the Tranche B 2020 Term Loan each had an interest rate of 4.000% as of the predecessor date of December 31, 2016. The Tranche B-II 2022 Term Loan had an interest rate of 3.500% as of the predecessor date of December 31, 2016. The interest rate on the Tranche B-III 2019 Term Loan and the Tranche B 2020 Term Loan were set with a minimum LIBOR of 1.00%. The interest rate on the Tranche B-II 2022 Term Loan was set with a minimum LIBOR of 0.75% and the interest rate on the Tranche B 2024 Term Loan is set with a minimum LIBOR of zero percent. The Floating Rate Senior Notes due 2018 had an interest rate of 4.762% as of the predecessor date of December 31, 2016.

(5) The Tranche B 2024 Term Loan is a secured obligation and is guaranteed by Level 3 Parent, LLC and certain of its non-regulated subsidiaries.

Senior Secured Term Loans

As of the successor date of December 31, 2017, Level 3 Financing, Inc., Level 3 Parent, LLC's direct wholly owned subsidiary ("Level 3 Financing") had a senior secured credit facility consisting of a $4.611 billion Tranche B Term Loan due 2024. The Tranche B 2024 Term Loan carries an interest rate, in the case of base rate borrowings, equal to (i) the greater of the Prime Rate, the Federal Funds Effective Rate plus 50 basis points, or LIBOR plus 100 basis points (with all such terms and calculations as defined or further specified in the applicable credit agreement) plus (ii) 1.25% per annum. Any Eurodollar borrowings under the Tranche B 2024 Term Loan bear interest at LIBOR plus 2.25% per annum.

The Tranche B 2024 Term Loan requires certain specified mandatory prepayments in connection with certain asset sales and other transactions, subject to certain significant exceptions. The obligations of Level 3 Financing, under the Tranche B 2024 Term Loan are, subject to certain exceptions, secured by certain assets of Level 3 Parent, LLC and, subject to pending regulatory approvals, certain of its material domestic telecommunication subsidiaries. Also, Level 3 Parent, LLC has guaranteed and, upon receipt of pending regulatory approvals, certain of its subsidiaries will guarantee the obligations of Level 3 Financing, under the Tranche B 2024 Term Loan. Subject to the receipt of pending regulatory approvals, Level 3 Communications, LLC and its material domestic subsidiaries will guarantee and, subject to certain exceptions, will pledge certain of their assets to secure the obligations of Level 3 Financing, under the Tranche B 2024 Term Loan.

Senior Notes

All of the notes reflected in the table above 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 101% of the principal amount or a “make whole” amount, plus accrued interest. In addition, the 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.

Capital Leases

As of the successor date of December 31, 2017, we had $179 million of capital leases. We lease 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 6.0% on average as of the successor date of December 31, 2017.

Debt Issuance Costs

For the successor period ended December 31, 2017, the predecessor period ended October 31, 2017, the predecessor years ended 2016 and 2015, we deferred costs of $0, $40 million, $11 million and $50 million, respectively, in connection with debt issuances. At the predecessor date of December 31, 2016, there was $112 million of unamortized debt issuance costs.

New Issuances

On the predecessor date of February 22, 2017, we completed the refinancing of all of our then outstanding $4.611 billion senior secured term loans through the issuance of a new Tranche B 2024 Term Loan in the principal amount of $4.611 billion. The term loans refinanced were our Tranche B-III 2019 Term Loan, Tranche B 2020 Term Loan, and the Tranche B-II 2022 Term Loan. The new Tranche B 2024 Term Loan bears interest at LIBOR plus 2.25 percent, with a zero percent minimum LIBOR, and will mature on February 22, 2024. The Tranche B 2024 Term Loan was priced to lenders at par, with the payment to the lenders at closing of an upfront 25 basis point fee. We recognized a charge of approximately $44 million for modification and extinguishment in the first quarter of 2017 related to this refinancing.

Repayments

On the predecessor date of September 29, 2017, the $300 million aggregate principal amount plus accrued and unpaid interest due under the Floating Rate Senior Notes due 2018 was paid and we recognized a loss on extinguishment of less than $1 million.

Aggregate Maturities of Long-Term Debt

Set forth below is the aggregate principal amount of our long-term debt and capital leases (excluding unamortized premiums) maturing during the following years:



	(Dollars in millions)⁽¹⁾
2018	$	8
2019	7
2020	8
2021	650
2022	1,610
2023 and thereafter	8,422
Total long-term debt	$	10,705


(1)	Actual principal paid in any year may differ due to the possible future refinancing of outstanding debt or the issuance of new debt.

Covenants

The term loan and senior notes of Level 3 Parent, LLC and Level 3 Financing, Inc. contain extensive affirmative and negative covenants. Such covenants include, among other things and subject to certain significant 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 including CenturyLink and its other subsidiaries, dispose of assets and merge or consolidate with any other person. Also, Level 3 Parent, LLC, as well as Level 3 Financing, Inc., will be required to offer to purchase certain of its long-term debt securities under certain circumstances in connection with a "change of control" of Level 3 Parent, LLC.

Certain of CenturyLink's and our debt instruments contain cross acceleration provisions. When present, these provisions could have a wider impact on liquidity than might otherwise arise from a default or acceleration of a single debt instrument.

Compliance

At the successor date of December 31, 2017 and the predecessor date of December 31, 2016, we believe we were in compliance with the financial covenants contained in their respective material debt agreements.