While it’s unclear how the offer will play out, Del Deo’s assumptions suggest that the company’s “debt maturity profile would shift from one where 20 arguably introduce some refinancing risk to one where 2027 becomes a do-or-die year.” Moody’s analysts wrote in a February note downgrading Lumen’s corporate-family rating to B2 from Ba3 that Lumen had “significant debt maturities beginning in January 2025 that will rise to over $9 billion of debt due in 2027.” With the debt exchange, through which Lumen is offering to issue up to $1.1 billion in new 10.5% Level 3 notes that have a 2030 maturity, Lumen seems “to be taking advantage of the opportunity to reshuffle some of its debt while it still has an opportunity,” Del Deo said. “The credit market is signaling that it believes the odds of a financial restructuring in the coming years are very high.” ![]() “Many of parent company bonds now trade with yields in the high teens or greater,” he wrote. See more: Lumen’s stock follows record annual decline with another steep plunge this year The company’s debt has sold off sharply as well, and stands of key interest on Wall Street, Del Deo noted. ![]() Shares of Lumen, formerly known as CenturyLink, have come under heavy pressure in recent years amid challenges for the company’s legacy wireline business. “And this morning’s exchange offer struck us as fairly interesting.” “We typically wouldn’t write about a relatively smallish debt exchange offer, but the nature of Lumen’s capital structure dictates that we pay even closer attention to its debt than we have historically,” SVB MoffettNathanson analyst Nick Del Deo wrote in a note to clients.
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