New Agreement with Creditors to Provide
Company with Significant Financial Flexibility
DENVER, Jan. 25,
2024 /PRNewswire/ -- Lumen Technologies, Inc. (NYSE:
LUMN) ("Lumen" or the "Company") today announced that it has
entered into an amended and restated transaction support agreement
(the "TSA") with a broadened group of creditors who now represent,
in the aggregate, over $12.5 billion
of the outstanding indebtedness and commitments of the Company and
its subsidiaries and represent over 70% in the aggregate of Lumen
and Level 3 debt maturing through 2027. The amended TSA
announced today is supported by a significantly larger group of
creditors across more of Lumen's capital structure than the
agreement previously announced on October
31, 2023. The TSA will, among other things, extend debt
maturities to primarily 2029 and beyond, provide $1.325 billion of financing to the Company
through new long-term debt and provide access to a new revolving
credit facility in an amount expected to be approximately
$1 billion. Lumen expects to complete
the transactions contemplated by the TSA in the first quarter of
2024, subject to the satisfaction of limited remaining closing
conditions. The broad support across the Company's capital
structure demonstrates creditors' and stakeholders' conviction in
Lumen's turnaround plan and growth strategy.
"This agreement represents another positive step forward in the
Lumen turnaround story and creates substantial runway for the
Company to achieve its financial and capital structure goals. The
TSA transactions, when completed, will provide Lumen significant
flexibility as we continue to execute on our transformation journey
of disrupting telecom," commented Kate
Johnson, President and Chief Executive Officer of Lumen.
Lumen plans to make certain term loan transactions available to
all holders in connection with the consummation of such
transactions. The transactions related to certain notes of the
Company and Level 3 will be executed on a privately negotiated
basis under Section 4(a)(2) of the Securities Act of 1933, as
amended (the "Securities Act"). The Company does not plan to make
such transactions available to all holders in connection with the
consummation of such transactions. Following consummation of the
TSA transactions, Lumen may assess potential follow-on transactions
with respect to non-participating debt.
Additional information can be found in the Company's Current
Report on Form 8-K filed with the SEC today and available on
Lumen's investor relations website at https://ir.lumen.com.
Guggenheim Securities, LLC served as financial advisor and
Wachtell, Lipton, Rosen & Katz served as legal advisor to the
Company.
About Lumen Technologies
Lumen connects the world. We are igniting growth by connecting
people, data, and applications – quickly, securely, and
effortlessly. Everything we do at Lumen takes advantage of our
network strength. From metro connectivity to long-haul data
transport to our edge cloud, security, and managed service
capabilities, we meet our customers' needs today and as they build
for tomorrow.
No Offer or Solicitation
This release is not intended to and does not constitute an offer
to sell or the solicitation of an offer to subscribe for or buy or
an invitation to purchase or subscribe for any securities, nor
shall there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. In particular,
this communication is not an offer of securities for sale into
the United States or any other
jurisdiction. No offer of securities shall be made in the United States absent registration under
the Securities Act, or pursuant to an exemption from, or in a
transaction not subject to, such registration requirements.
Forward-Looking Statements
Except for historical and factual information, the matters set
forth in this release and other of our oral or written statements
identified by words such as "estimates," "expects," "anticipates,"
"believes," "plans," "intends," "will," and similar expressions are
forward-looking statements as defined by the federal securities
laws, and are subject to the "safe harbor" protections thereunder.
These forward-looking statements are not guarantees of future
results and are based on current expectations only, are inherently
speculative, and are subject to a number of assumptions, risks and
uncertainties, many of which are beyond our control. Actual events
and results may differ materially from those anticipated,
estimated, projected or implied by us in those statements if one or
more of these risks or uncertainties materialize, or if underlying
assumptions prove incorrect. Factors that could affect actual
results include but are not limited to: our ability to close the
transactions contemplated by the TSA on the timeline currently
expected or at all, including the ability of the parties to
negotiate definitive agreements with respect to the matters covered
by the term sheet included in the TSA and the occurrence of events
that may give rise to failure to satisfy any of the conditions to
the closing of the transactions contemplated by, or a right of any
of the parties to terminate, the TSA; the effects of intense
competition from a wide variety of competitive providers, including
decreased demand for our more mature service offerings and
increased pricing pressures; the effects of new, emerging or
competing technologies, including those that could make our
products less desirable or obsolete; our ability to successfully
and timely attain our key operating imperatives, including
simplifying and consolidating our network, simplifying and
automating our service support systems, attaining our Quantum Fiber
buildout goals, strengthening our relationships with customers and
attaining projected cost savings; our ability to safeguard our
network, and to avoid the adverse impact of cyber-attacks, security
breaches, service outages, system failures, or similar events
impacting our network or the availability and quality of our
services; the effects of ongoing changes in the regulation of the
communications industry, including the outcome of legislative,
regulatory or judicial proceedings relating to content liability
standards, intercarrier compensation, universal service, service
standards, broadband deployment, data protection, privacy and net
neutrality; our ability to generate cash flows sufficient to fund
our financial commitments and objectives, including our capital
expenditures, operating costs, debt repayments, taxes, pension
contributions and other benefits payments; our ability to
effectively retain and hire key personnel and to successfully
negotiate collective bargaining agreements on reasonable terms
without work stoppages; our ability to successfully adjust to
changes in customer demand for our products and services, including
increased demand for high-speed data transmission services; our
ability to successfully maintain the quality and profitability of
our existing product and service offerings, to introduce profitable
new offerings on a timely and cost-effective basis and to
transition customers from our legacy products to our newer
offerings; our ability to successfully and timely implement our
corporate strategies, including our deleveraging and buildout
strategies; our ability to successfully and timely realize the
anticipated benefits from the divestiture of our European, Middle
Eastern and African business and our divestitures completed in
2022, and to successfully operate and transform our remaining
business; changes in our operating plans, corporate strategies, or
capital allocation plans, whether based upon changes in our cash
flows, cash requirements, financial performance, financial
position, market or regulatory conditions, or otherwise; the impact
of any future material acquisitions or divestitures that we may
transact; the negative impact of increases in the costs of our
pension, healthcare, post-employment or other benefits, including
those caused by changes in markets, interest rates, mortality
rates, demographics or regulations; the potential negative impact
of customer complaints, government investigations, security
breaches or service outages impacting us or our industry; adverse
changes in our access to credit markets on favorable terms, whether
caused by changes in our financial position, lower credit ratings,
unstable markets, debt covenant restrictions or otherwise; our
ability to meet the terms and conditions of our debt obligations
and covenants, including our ability to make transfers of cash in
compliance therewith; the impact of any purported notice of default
or notice of acceleration arising from alleged breach
of covenants under our credit documents; our ability to maintain
favorable relations with our security holders, key business
partners, suppliers, vendors, landlords and financial institutions;
our ability to timely obtain necessary hardware, software,
equipment, services, governmental permits and other items on
favorable terms; our ability to meet evolving environmental, social
and governance ("ESG") expectations and benchmarks, and effectively
communicate and implement our ESG strategies; the potential adverse
effects arising out of allegations regarding the release of
hazardous materials into the environment from network assets owned
or operated by us or our predecessors, including any resulting
governmental actions, removal costs, litigation, compliance costs
or penalties; our ability to collect our receivables from, or
continue to do business with, financially-troubled customers; our
ability to continue to use or renew intellectual property used to
conduct our operations; any adverse developments in legal or
regulatory proceedings involving us; changes in tax, pension,
healthcare or other laws or regulations, in governmental support
programs, or in general government funding levels, including those
arising from governmental programs promoting broadband development;
our ability to use our net operating loss carryforwards in the
amounts projected; the effects of changes in accounting policies,
practices or assumptions, including changes that could potentially
require additional future impairment charges; continuing
uncertainties regarding the impact that COVID-19 and its aftermath
could have on our business, operations, cash flows and corporate
initiatives; the effects of adverse weather, terrorism, epidemics,
pandemics, rioting, vandalism, societal unrest, or other natural or
man-made disasters or disturbances; the potential adverse effects
if our internal controls over financial reporting have weaknesses
or deficiencies, or otherwise fail to operate as intended; the
effects of changes in interest rates or inflation; the effects of
more general factors such as changes in exchange rates, in
operating costs, in public policy, in the views of financial
analysts, or in general market, labor, economic or geopolitical
conditions; and other risks referenced from time to time in our
filings with the U.S. Securities and Exchange Commission. You are
cautioned not to unduly rely upon our forward-looking statements,
which speak only as of the date made. We undertake no obligation to
publicly update or revise any forward-looking statements for any
reason, whether as a result of new information, future events or
developments, changed circumstances, or otherwise. Furthermore, any
information about our intentions contained in any of our
forward-looking statements reflects our intentions as of the date
of such forward-looking statement, and is based upon, among other
things, regulatory, technological, industry, competitive, economic
and market conditions, and our related assumptions, as of such
date. We may change our intentions, strategies or plans without
notice at any time and for any reason.
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SOURCE Lumen Technologies