Junky Junk: Level 3

Standard & Poor’s has slashed the debt rating of Level 3 Communications “deeper into junk territory and said it may cut it again, citing the company’s cash tender offers for debt due in 2008,” reports
. Why? Because the company is refinaning its debt, and under the “proposed tender offers, debt holders will receive less than full value for their bonds, and S&P said it thus views the tender as tantamount to a default. Moreover, the tender offers and proposed refinancing will not materially reduce the company’s onerous $5.1 billion debt balance, S&P

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