Lumen Technologies’ wholly‑owned subsidiary, Level 3 Financing, Inc., announced on December 8, 2025 that it would issue $1.25 billion of 8.500% senior notes due 2036. The notes were priced at 100 % of principal on December 9 and are scheduled to mature on January 15, 2036, with the transaction expected to close on December 23.
The proceeds will be used to purchase up to $1.5 billion of Level 3 Financing’s existing second‑lien notes, including 4.000% notes due 2031, 3.875% notes due 2030, 4.500% notes due 2030, and 4.875% notes due 2029. By replacing these higher‑cost notes, Lumen will reduce its overall interest expense and strengthen its debt‑service coverage ratios.
This refinancing is part of Lumen’s broader strategy to shift from legacy consumer services to high‑margin AI infrastructure and private‑connectivity offerings. The company is concurrently divesting its Mass Markets business to AT&T, a transaction projected to lower its debt‑to‑EBITDA ratio from 4.9× to 3.9×. The new notes extend maturities and provide the liquidity needed to support this strategic pivot.
Lumen’s financial position has been under pressure in recent quarters. In Q3 2025 the company reported a net loss of $621 million, compared with a $148 million loss in Q3 2024, and revenue of $3.087 billion versus $3.221 billion in the prior year. Adjusted EBITDA fell to $787 million from $899 million. The debt refinancing is expected to mitigate interest costs and improve leverage, helping the company invest in growth areas while managing its balance sheet.
Management emphasized the importance of the transaction. CFO Chris Stansbury highlighted that extending maturities and reducing capital costs will free up capital for strategic initiatives, while CEO Kate Johnson underscored Lumen’s focus on AI and private‑connectivity services as the company moves away from legacy markets.
Although the exact annual interest savings from this issuance have not been disclosed, comparable refinancing actions in 2025 saved $135 million in annual interest expense. The new notes are likely to produce similar savings, further improving Lumen’s financial flexibility and supporting its transition to a higher‑margin business model.
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