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
Reuters. 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
said.”
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