Lumen Overhauls Debt Load With Eye on Growth

Summary

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Bloomberg Businessweek Podcast Summary

Episode: Lumen Overhauls Debt Load With Eye on Growth
Date: October 14, 2025
Hosts: Carol Massar & Tim Stenovec
Featured Guest: Chris Stansberry (CFO & EVP, Lumen Technologies)
Special Guest: Nina Trentman (Senior Editor, Bloomberg News)

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Episode Overview

This episode focuses on how Lumen Technologies, a major U.S.-based global communication services company, has aggressively restructured its debt, repositioned for growth, and is seizing opportunities in the rapidly evolving AI-driven, cloud-based networking space. Chris Stansberry, Lumen's CFO, offers insights on strategic asset sales, massive refinancing efforts, and the burgeoning demand from hyperscalers and AI enterprises for high-performance data transport.

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Key Discussion Points and Insights

1. Lumen’s Business Transformation and New Market Focus

• Lumen has divested non-core assets, most notably announcing the sale of its mass-market residential fiber unit to AT&T for $5.75 billion in cash.
• The company’s strategy is shifting towards leasing fiber routes to hyperscalers (large cloud providers) and social media giants to deliver low-latency connectivity for AI and data center traffic.

Quote:
"The network of yesterday wasn’t built to support [the AI multi-cloud world]... What we’re doing is building a mesh that basically goes anywhere to anywhere, where the customer on demand can move those workloads where they need them in super low latency manner. That’s the big change."
— Chris Stansberry, [02:45]

• It’s not just about hyperscalers: enterprise clients also need robust infrastructure as they push further into AI workloads.

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2. Debt Restructuring and Financial Transformation

• When the current leadership joined, Lumen was burdened with significant near-term debt (with half due in 2027) and high interest costs.
• Lumen undertook the largest out-of-court debt restructuring in history nearly two years ago, pushing maturities out but initially at a high interest cost ($1.4 billion annualized).

Quote:
"The balance sheet was not our friend... That was job number one. We really needed to strengthen the foundation of the company so that we could go do the things that we’re executing against today."
— Chris Stansberry, [04:23]

• A pivotal realization during negotiations: new demand from hyperscalers presented a huge monetization opportunity for Lumen’s existing conduit infrastructure.
  • $8 billion in deals signed for leasing fiber/conduit capacity.
• Cash from these deals enabled Lumen to refinance and deleverage.
  • Once the AT&T deal closes, debt will drop to just over $13 billion and interest expense will halve to about $700 million annually.

Quote:
"In a two-year period, dramatically reshaping both the quantum of debt as well as the maturity curve, and now that balance sheet is a real asset for us as we invest in the AI multi-cloud world."
— Chris Stansberry, [05:40]

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3. Regulatory and Legislative Support for Infrastructure Investment

• New U.S. legislation has improved incentives for capital-intensive businesses, especially infrastructure providers like Lumen.
  • Past tax law created disadvantages versus asset-light firms.
  • Recent changes (e.g., interest deductibility relief, accelerated depreciation) help level the playing field for large-scale network investment.

Quote:
"The recent legislation has leveled that playing field... The ability to accelerate depreciation to help on the tax side is significant. That reduces the risk that companies that are investing in infrastructure take on when they make those kinds of investments. So it’s absolutely an opportunity for us."
— Chris Stansberry, [07:14]

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Notable Quotes & Memorable Moments

• "Really what we see as an opportunity... is the AI multi-cloud world that’s being developed right now."
  — Chris Stansberry, [02:33]

• "Our annualized interest expense at that point was about $1.4 billion. But from there... we signed $8 billion worth of deals... That allowed us to monetize an asset that has been in the ground for 25 years."
  — Chris Stansberry, [04:46]

• "When that [AT&T] closes, our debt will be down to just over $13 billion and our interest expense... will be about $700 million."
  — Chris Stansberry, [05:22]

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Key Timestamps

• [01:28] Introduction of Chris Stansberry (CFO, Lumen) and Nina Trentman (Bloomberg News)
• [02:28] Lumen's new business strategy: leasing to hyperscalers, role in AI-driven cloud networks
• [04:01] Discussion of Lumen's debt restructuring, impact on interest costs, and new deals
• [06:22] The role of recent U.S. legislation in enabling infrastructure investment
• [08:02] Closing remarks and newsletter promotion

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Episode Summary

This edition gives a clear look at how Lumen is leveraging legacy network infrastructure and new capital market moves to pivot from traditional telecom to essential AI and cloud enabler. Through shedding non-core assets and transformative debt deals, Lumen’s leadership feels well-positioned to meet the rapidly escalating infrastructure needs of cloud giants and AI-driven enterprises. New regulatory backing for infrastructure investment further supercharges the company’s ambitions.

If you want to follow in-depth CFO strategies and the evolving financial landscape, check out Bloomberg's CFO Briefing newsletter featuring this conversation.

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Transcript

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Bloomberg Audio Studios Podcasts Radio news.

[Host (Bloomberg Radio)]

You're listening to Bloomberg Business Week with.

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Carol Massar and Tim Stanovec on Bloomberg Radio.

[Host (Bloomberg Radio)]

It is time for another edition of the CFO Briefing. This week we are joined by Chris Stansberry, Chief Financial Officer and EVP of the Louisiana based publicly traded global communication services company Lumen Technologies. Market cap of about $6.8 billion shares so far this year up more than 25%. Also with us here in the studio is Nina Trentman, Bloomberg News Senior Editor. She writes the CFO Briefing newsletter. You can subscribe to [e-mail] CFO-Briefing Chris is featured in the most recent edition of the newsletter. Chris joins us from Denver. Chris, welcome. The company divesting non core assets for e.g. earlier this year announcing the sale of its mass market residential fiber unit to AT&T for $5.75 billion in cash. Now what you're planning to do is leasing existing fiber routes to hyperscalers and social media companies to transport AI traffic between data centers. I want to know how big of an opportunity is it to lease to these hyperscalers?

[Chris Stansberry]

Yeah, thanks for having me today. It's been quite a journey at Lumen over the last three and a half years. Really what we see as an opportunity and have seen really through our transformation is the AI multi cloud world that's being developed right now. The network of yesterday wasn't built to support it and if you really think about the economics of AI and the economics of a gpu, you want to keep that GPU fed as much as it can consume so that they're spinning constantly and that's where you get the economic benefit. So the problem with the network that has existed so far is that as those data loads get spread further and further away, as data centers are in search of power and cooler temperatures, there's latency problems and there's access problems. It takes a long time for networking to adjust. What we're doing is building a mesh that basically goes anywhere to anywhere where the customer on demand can move those workloads where they need them in super low latency manner. That's the big change. It's not just hyperscalers. It's really the full connectivity between the hyperscalers running those clouds, the hyperscalers obviously building those AI algorithms and large enterprise customers who are on the AI journey now and, and will be using it much more heavily in the future.

[Co-host/Interviewer]

Chris, thanks for joining us again. It's great to chat. Just wondering with the AT&T deal and also what you've done in capital markets in recent weeks. You've really improved your financing structure. You've, you're saving hundreds of millions in interest expense as a year. Talk to us a little bit about that.

[Chris Stansberry]

Yeah. If you go back in time, when we all joined Lumen and saw this opportunity, the balance sheet was not our friend. We had a lot of debt. Half that debt was due in one year. It was due in 2027. And that was job number one. We really needed to strengthen the foundation of the company so that we could go do the things that we're executing against today. So, so that was really accomplished through a couple of things. One is we did the largest out of court debt restructuring in history. That's not quite two years ago. And that allowed us to push those maturities out a bit, but at a significant expense. Our annualized interest expense at that point was about $1.4 billion. But from there we saw in the middle of those negotiations, we saw this opportunity with the hyperscalers and soon after that that debt negotiation was completed. We, we signed $8 billion worth of deals and that has grown since. That allowed us to monetize an asset that has been in the ground for 25 years, which is conduit that we can, we can blow fiber through to meet the needs of the hyperscalers in a fairly short period of time versus building new. And that's really the core enduring advantage of this business. And then we layer the digital on top of that. But the Cash from those deals allowed us to refinance and deliver. So we've made a number of moves so far this year. And with the sale of the consumer fiber business to AT&T, when that closes, our debt will be down to just over $13 billion and our interest expense on an annualized basis will be about 700 million. So in a two year period, dramatically reshaping both the quantum of debt as well as the maturity curve and now that balance sheet is a real asset for us as we invest in the AI multi cloud world.

[Co-host/Interviewer]

Yeah, I'm actually wondering about the investments. Of course there's a lot of capex that's required in a business like yours. We've seen earlier this year the one big beautiful bill act that was passed which tries to encourage investment, including in capital investments by allowing you as CFO to depreciate certain investments faster. Like do you think this will make an impact as you're thinking about future investments in your business here in the U.S. definitely.

[Chris Stansberry]

If you go back to the 2017 legislation that the big problem with that legislation is it created an unequal playing field between say more service oriented or asset light companies and asset heavy or infrastructure companies. And if, if you look at where the administration is focused today, it's clearly around infrastructure. That's where I think the US has the biggest challenges really isn't, is making sure that we don't get too far behind with our infrastructure. So the recent legislation has leveled that playing field and really that was around two things. The first is, is that there was interest deductibility limits that that used to exist that have been relaxed dramatically because again asset heavy infrastructure companies tend to have higher leverage. And then to your point, the ability to accelerate depreciation to to help on the tax side is significant. That reduces the risk that companies that are investing in infrastructure take on when they make those kinds of investments. So it's absolutely an opportunity for us.

[Host (Bloomberg Radio)]

Chris going to have to leave it there, but you got to come back and join us once again. And I do remind everybody that Chris is featured in the most recent edition of the CFO Briefing Newsletter. You can sign up for it at bloomberg.com/cfo-briefing. We've been speaking with Chris Dansberry, CFO and EVP of Lumen Technologies. Also joining us here in the studio, Nina Trentman, Bloomberg News Senior Editor. Sign up for that CFO Briefing newsletter.

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