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Bank of America weighs extra collateral as Cogent's refi talks get pricier

Published Sep 8, 2026
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Summary:
  • Bank of America has discussed giving investors added protection for a new-money raise at Cogent Communications, including a possible pari-plus structure, per people familiar.
  • A first-lien bond to refinance $750 million of 7% notes due June 2027 is being floated, with talk moving to an 11% coupon from 9.5% and pricing indicated around 96 cents per dollar.
  • Cogent sold 10 former Sprint data centers in June for about $225 million, reported about $3.1 billion of total liabilities in Q2, and S&P lowered the rating to B- from B last month.

What is on the table

People familiar with the matter say Bank of America has explored offering guarantees or beefed-up collateral to fresh lenders via a so-called pari plus setup. In that design, the new protections would sit outside the existing creditor group.

The refinancing pitch and where pricing is landing

Bank of America is pitching a prospective first-lien issue that would repay $750 million of Cogent's 7% unsecured notes that come due in June 2027. According to the people, talk on the coupon has shifted higher to about 11% from an initial 9.5%, and the deal is being shown at roughly 96 cents per $1. Terms are still fluid and could change.

How legacy debt is trading

Concerns about a tougher refinancing mix and the potential use of a pari-plus structure have pressured the company's existing bonds. Cogent's unsecured note due 2027 changed hands on Friday around 91 cents per dollar, down from nearly par on Aug. 7, per Trace data.

What management is saying and what is selling

Spokespeople for Bank of America and Cogent did not comment. On the company's early August earnings call, Chief Executive Officer Dave Schaeffer said Cogent was "in the process of completing the refinancing of our 2027 notes which we anticipate will complete in the third quarter of this year."

Cogent is also divesting the data centers it picked up from T-Mobile in 2023, which had formerly run as Sprint sites. In June, the sale of 10 sites generated about $225 million, which Schaeffer said helped cut leverage, and he also noted interest from multiple parties in the remaining former Sprint locations.

When lenders rearrange terms, thoughtful savers focus on steady protection and long term growth. Join Briefs Finance CEO Jaspreet Singh on September 29th for a FREE live investor workshop, How to Profit From A Dollar That's Losing its Value, where he shows how we're spotting investment opportunities as the dollar falls. Save your spot.

Investor asks, balance sheet, and ratings pressure

As part of the refinancing, prospective buyers of the new debt are seeking covenants governing how proceeds from the data center sales can be used, according to people familiar. In the second quarter, the company reported around $3.1 billion in total liabilities consisting of debt and finance lease obligations, filings show.

S&P Global Ratings last month reduced Cogent's rating to B- from B, citing high leverage. The rater also flagged that after 2027 Cogent will stop receiving T-Mobile payments tied to the Sprint deal, which it said is about a $100 million annual hit to EBITDA and "will have a material impact."

What this means for your money

Higher coupons, discounted pricing, and add-on collateral talks often translate into lower marks on existing bonds and tighter terms for new ones. If you own Cogent credit or funds that hold it, the drift lower in the 2027s, the potential pari-plus feature, and the S&P downgrade are the moving parts to watch as they filter through to pricing and risk.

A clear plan helps preserve purchasing power and nurture future financial opportunities. Our CEO Jaspreet Singh is hosting a FREE live investor workshop, How to Profit From A Dollar That's Losing its Value, on September 29th. Sign up free to join him live.

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