Qwest Sells a Refinancing “Baby Bond”

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Qwest Corporation, a division of CenturyLink (NYSE:CTL), has sold a new note issue with a 6.5% coupon.  This large issue of nearly 39.1 million shares (proceeds of near $1 billion which includes the overallotment allocation) will be used to refund the 7.50% notes (NYSE:CTW) and most of the 7.375% notes (NYSE:CTQ) that Qwest currently has outstanding.

Qwest has had a number of “baby bond” issues outstanding for many years and after this new issue begins trading and with 1 older issue being called (as well as most of another) they will continue to have either 7 or 8 issues outstanding with coupons ranging from 6.125% to 7.375%.

Exchange traded debt issues do not trade on the OTC grey market prior to trading on their permanent marketplace so there is no temporary ticker to report.  Additionally, while this issue will trade in the next couple of days, there has been no public release of the ticker symbol to be used on the NYSE.


It is worth noting that Qwest debt is no longer investment grade as both Standard and Poor’s and Moody’s have downgraded Qwest in recent history.  The issue with Qwest is that a large part of their business remains the “legacy” landlines they operate and needless to say this is a slowly dwindling revenue source. While we would not hesitate to own Qwest debt at this moment they need to be watched as CenturyLink does NOT backstop this debt.

Details of this new issue can be found here.



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Tim McPartland
Tim McPartland is a private investor with over 45 years of investing experience. His analysis, research and writing is devoted to the hunt for income producing securities of all types, but in particular specializing in preferred stocks, exchange traded debt and Master Limited Partnerships.
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