Lumen Technologies’ creditor advisors are said to have signed NDAs to discuss a debt extension and inject fresh cash, as per sources. They said that a key component includes allowing Lumen to pursue debt buybacks at less than par. Further, they added that bondholders wanted to ‘tighten credit documents’ to reduce Lumen’s ability to incur more debt and limit the use of proceeds from asset sales. The potential investment would be less than $1bn with the cash sitting at its Level 3 Communications subsidiary, they noted. Talks are only at early stages and nothing has been confirmed. Lumen was recently downgraded to B- from B by Fitch on the back of “increased event risks”. The company has about $1.85bn of debt maturing in 2025 and a $9.4bn of debt due in 2027.
Lumen’s bonds were trading stable – its 4% 2027s are trading at 66 cents on the dollar, yielding 17.7%.
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