This morning, q announced its intention to sell $500M in new debt due 2018, intending to use the proceeds to redeem $525M in 7.25% senior notes that mature in February of next year. Just seven hours later, the offering had morphed into $800M, a full 60% more than originally planned. The notes will bear interest at 7.125% and were priced at 98.44% - not a bad price at all.
Qwest's move on the credit markets follows on the heels of Level 3's offering of $640M earlier this week and Constellation's investment in Hibernia. Clearly there has been additional thawing in last year's credit deep freeze. I'm sure there are more such deals on the way.
Yesterday, Qwest gave an optimistic update to its 2009 guidance. Both free cash flow and EBITDA are expected to fall in the top end of their expected ranges. Additionally, at an investor conference, the company made some new noises about the worth of its longhaul network for M&A. After so much defense for so long, I suspect that this is the year we may see Qwest finally make a major move of some sort.
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