Moves Forward as a Stronger Company with
Increased Financial Flexibility
Primed to Execute on Business
Transformation Plans
DENVER, March 22,
2024 /PRNewswire/ -- Lumen Technologies, Inc.
(NYSE: LUMN) ("Lumen" or the "Company"), a global integrated
network solutions provider that unleashes the world's digital
potential, today announced the successful completion of the
transactions contemplated by the previously announced amended and
restated transaction support agreement (the "TSA") that the
Company, Level 3 Financing, Inc. ("Level 3") and Qwest Corporation
entered into with certain of the Company's creditors.
Lumen achieved participation in the TSA transactions of over
$15 billion of outstanding
indebtedness and commitments of the Company and its subsidiaries.
With respect to the term loan transactions open to all lenders, the
Company achieved 94.4% participation for the Lumen TLA/A-1 term
loans, 98.5% for the Lumen TLB term loans and 99.5% for the Level 3
TLB term loans. The broad support for the TSA transactions across
the Company's capital structure demonstrates creditors' and
stakeholders' belief in Lumen's turnaround plan and pivot to growth
strategy.
Following the closing of the TSA transactions, Lumen is in a
strengthened liquidity position, including as a result of closing a
new approximately $1 billion
revolving credit facility maturing in June
2028 and completing the private placement of $1.325 billion aggregate principal amount of
senior secured notes due November
2029.
"This is a significant milestone that clears the runway for our
transformation and signals confidence in our strategy and
progress," said Kate Johnson,
president and CEO of Lumen. "The transaction provides the time and
capital to fuel our return to growth."
"This process over the last several months could not have been
possible without the support of many stakeholders. We sincerely
thank the Lumen team for their dedication and continued commitment
to the Company during this process," said Chris Stansbury, Chief Financial Officer of
Lumen. "We also thank our customers, vendors and partners for their
unwavering trust in the business and our future."
Debt Maturity Profile Following Consummation of TSA
Transactions
Lumen's near-term debt maturity profile has
significantly improved, with the amount of maturities outstanding
for 2025 to 2026 reduced from approximately $2.1 billion to approximately $600 million and total maturities outstanding for
2027 reduced from approximately $9.5
billion to approximately $800
million. Following the completion of the TSA
transactions, the debt maturity profile of the Company and its
subsidiaries will be as follows:
Additional information can be found in the Company's Current
Report on Form 8-K, which will be filed with the SEC.
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 dedicated to furthering human progress through technology 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.
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 achieve the
expected benefits from 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