Lumen Technologies is trying to climb back toward investment grade credit. "We're not going for, you know, triple A," said Chief Financial Officer Chris Stansbury, adding, "But we will see, I think, some rating improvements in the coming year." He discussed the outlook on Bloomberg's Credit Edge podcast. Today, the three big ratings firms place the company about five to six rungs into high yield.
After lengthy talks, Stansbury and Chief Executive Officer Kate Johnson put together a transaction to tackle roughly $20 billion of obligations. It ranks among the largest out-of-court restructurings and drew complaints from peers who said it set creditors against one another.
At that point, Lumen's leadership had fallen out of favor, while segments of its network lay idle beneath the ground. Then artificial intelligence hyperscalers went shopping for infrastructure. As AI capital arrived, both long-time holders and newcomers enjoyed strong gains. "It was truly a once-in-a-lifetime opportunity to reposition the company," Stansbury said. "Kate and I knew things that the rest of the world didn't, that there was this multi-billion-dollar opportunity that lay ahead of us that would truly clear the path for us on our debt."
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Lumen has remade itself as an enterprise-focused fiber and digital networking business. Stansbury also flagged another lever in legacy copper. He said the company's copper-based products are "nearing impossibility" to maintain, but because the metal is so pure, retired lines can be excavated and turned into new products through recycling.
Depending on copper prices and how many rivals choose to excavate, he sees the haul being worth hundreds of millions of dollars. AT&T and Verizon have already started, he noted. His push to accelerate the shift: "We have to say goodbye to the past faster."
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