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Lumen Technologies’ bonds fell by 1.0-1.6 points after it was downgraded to B- from B by Fitch. This came on the back of “increased event risks” and an “overhang on Lumen’s credit profile” arising out of the formation of a bondholder group to discuss refinancing options and covenant compliance. This formation is related to the use of proceeds received from the sale of Lumen’s LatAm business and execution risks related to its ability to strengthen its operating profile. Lumen’s EBITDA is expected to decrease and the company has a large maturity wall. It has about $1.85bn of debt maturing in 2025 and a $9.4bn of debt due in 2027. Besides, a broader challenge in the telecom sector also weighs on the company’s execution strategies.
Lumen’s 4.5% 2029s fell 1.6 points to 33.4 cents on the dollar.