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DENVER - Lumen Technologies, Inc. (NYSE:LUMN) announced Monday it has successfully completed a repricing transaction of Level 3 Financing, Inc.’s $2.4 billion credit facilities at Term SOFR + 3.25%, representing a 100 basis point reduction that will save $24 million annually in interest expenses. The company, which carries total debt of $18.17 billion and maintains a current ratio of 2.13, shows strong liquidity management according to InvestingPro data.
The company also closed on an additional $425 million of 7.000% First Lien Notes due 2034, using the proceeds to redeem all $373 million of Level 3’s 10.750% First Lien Notes due 2030. This refinancing extends debt maturities by more than three years and reduces annual interest expense by an additional $10 million. For deeper insights into Lumen’s debt structure and financial health (rated FAIR by InvestingPro), investors can access the comprehensive Pro Research Report, available with an InvestingPro subscription.
"Through a series of complex transactions over the past two years, we’ve meaningfully reduced our debt and simplified our capital structure," said Lumen’s Chief Financial Officer Chris Stansbury in the press release statement. "By lowering our debt and creating capacity for investment, we can focus our capital on fueling growth."
The repricing transaction also included modifications to covenants in the Credit Agreement to provide additional flexibility to Level 3, according to the company.
The Additional First Lien Notes were offered and sold only to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. persons outside the United States in accordance with Regulation S. The notes are not registered under the Securities Act of 1933 and holders do not have registration rights.
Lumen Technologies describes itself as a provider of network services for AI and digital applications, offering metro connectivity, long-haul data transport, edge cloud, security, and managed service capabilities. The company, with a market capitalization of $6.06 billion and annual revenue of $12.82 billion, has shown strong momentum with a 50.25% price return over the past six months. InvestingPro analysis suggests the stock is currently trading above its Fair Value, with 12 additional ProTips available for subscribers.
In other recent news, Lumen Technologies announced the completion of a $425 million notes offering through its subsidiary, Level 3 Financing, Inc. The proceeds from this offering, alongside cash reserves, will be used to redeem $373 million of its 10.750% First Lien Notes due 2030, including associated premiums and fees. This financial move is part of Lumen’s broader strategy to manage its debt effectively. Additionally, Lumen is advancing its network infrastructure to support the growing demand for AI workloads, planning to expand its intercity fiber miles to 47 million by 2028. This expansion more than doubles its current U.S. network infrastructure. In a bid to improve service delivery, Lumen has launched Wavelength RapidRoutes, offering 100G and 400G wavelength connections with a 20-day delivery agreement. This service aims to reduce provisioning delays for enterprises. Furthermore, Lumen outlined its strategic focus on becoming a trusted network for the AI economy, emphasizing network infrastructure, digital platform transformation, and ecosystem creation.
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