Denver-based Level 3 Communications set new records in the high-yield market in late February with a $2.2 billion bond deal that included the largest ever high-yield offering in euros. Not only did Level 3 raise e800 million, the largest ever non-dollar high-yield bond issue, it went on to raise more than $5 billion on the same day through parallel equity and convertible bond issues. "This really was a windfall deal for the borrower," says one of the co-lead managers. "I think Level 3 really surprised themselves with how much they could raise in the markets. This is certainly a landmark for them."
It was also a defining moment for the European high-yield markets. The fact that European companies are pushing towards the important $1 billion mark in high-yield issues has sent an important signal to borrowers that the European markets oVer a viable alternative to the US markets for large high-yield Wnancing. The previous record for high-yield euro issues was held by UK cable company NTL, which raised e720 million via Morgan Stanley in November 1999. Bankers note that new issues, particularly in the telecom sector, are seeing a better welcome in the euro sector than in the dollar market.