Today q announced they have raised $750M, selling $810.5M in 8.375% notes due 2016, priced at about $0.925 on the dollar. They had originally planned to raise just $300M, but apparently there was much more demand for the paper than anyone anticipated. When coupled with the recent $220M expansion of its senior secured debt by Level 3 Communications (NYSE:LVLT, news, filings) on Monday, one has to wonder if the credit deep-freeze is over or at least melting just slightly here and there.
Of course, it would be silly to suggest that money is cheap at this point. Qwest and Level 3 simply have more urgent refinancing needs than most others in the telecom and internet infrastructure sector. It is natural, therefore, that they would try to immediately squeeze through any opening that might appear. Others will be more opportunistic, they will need better prices in order to justify raising money. Is there money now available to facilitate M&A? Hmmm, I suspect we’re not ready for that just yet. Perhaps next we will see those in the datacenter market raise money, Dupont Fabros Technology (NYSE:DFT, news, filings) still has partially constructed facilities awaiting capital.
Qwest also announced that Q1 revenues will be a bit lighter than expected (surprise surprise!), but that earnings will be a bit stronger. The devil of course will be in the details, which we won’t see until April 29.