The Credit Edge by Bloomberg Intelligence Sep 17, 2026 47m 35m saved
With Chris Stansbury, President and CFO at Lumen Technologies
Lumen carried $20 billion of debt, half of it due in a single year. Chris Stansbury said that when Kate Johnson arrived as chief executive and he showed her the maturity curve, she called it a middle finger chart.
The company was quarters away from what he called a bridge too far. What it had instead of a restructuring plan was a set of unsigned network deals with hyperscalers that Stansbury could not disclose to the creditors sitting across the table.
"And so, we knew that there were going to be winners and losers, but we had to keep as many winners as possible. If we were going to be able to pull this off, it was a Moonshot and it worked."
Stansbury ran one of the largest out-of-court restructurings on record, extending $12 billion of debt and raising $1.3 billion of new financing in 2024, and spent the process as the public face of a company creditors were betting would file. He is now president and CFO of a business he says is fully funded on capex out of operations.
The full interview is covered here so you can skip it. 47 minutes of audio, 12 minutes of reading.
Here are the 11 lessons that matter.
Key Takeaways
Half of $20B of debt came due in one year, split across three borrowing entities with very different asset cover
He refused to fix the strong entity alone: the condition was that everybody came to the table
"It's greed that got us into the mess and it's greed that got us out of it" — the dividend, then the creditors
Investors at a JPMorgan conference took bets at the bar on when Lumen would file Chapter 11
Lumen goes from 12M fiber miles in 2022 to about 58M in 2030, built for hyperscalers and for itself
Capex is now funded out of operations, taking leverage from roughly 4x toward the low 3s
The legacy copper network is a cash source twice over: avoided capex, and the scrap metal itself
He says not all AI is good AI, because some internal wins do not cover the token cost
1. How Lumen Got Stuck
Stansbury's account of the industry starts with capital intensity. Every new generation of telecom technology needed its own physical layer, costing hundreds of millions or billions to deploy, which is why copper is still in the ground.
"If you look at kind of the history of enterprise telco, it was really one of no innovation." — Chris Stansbury
What companies did instead of innovating was buy each other, rarely integrating what they bought, taking the cost savings out of management layers, and routing the spare cash into dividends that cheap debt made sustainable. By the time Stansbury arrived, and Johnson six months later, the company was close to running out of room. They cut the dividend and started selling non-strategic assets.
Proceeds from one of those sales went to paying down debt, and a creditor group alleged a default. Stansbury called the argument weak and said Lumen negotiated anyway, because it was in the middle of talks worth billions with hyperscalers over unused assets and could not afford a court fight.
2. Everyone at the Table
Asked what was on the table from the standard liability-management playbook, Stansbury said the counterparty was an ad hoc group and that the real problem was structural rather than tactical.
The $20 billion sat in three borrowers. Lumen at the parent had $9 billion with weak asset protection. Level 3, the former CenturyLink acquisition, had $9 billion with good assets. Qwest Corp had $2 billion, also with good assets. The tension was that value in the strongest box had to be used to solve the weakest.
"When our CEO joined and I showed her the maturity curve, she said, that looks like a middle finger chart." — Chris Stansbury
"And so what we insisted on from the beginning was that we will address the alleged default in that strong entity, level three, but we're only going to do it if everybody's at the table." — Chris Stansbury
Asked directly whether the strategy was a friendly deal or a majority deal that cuts other holders out, he said the former, because the two large groups were too evenly matched to pit against each other. The negotiation came down to how much extra security and coupon the Level 3 holders would share with their counterparts at the parent.
3. Greed In, Greed Out
The economic prize behind the restructuring was never disclosed during it. Stansbury said the hyperscaler deals were a binary outcome months away that Lumen could not commit to, and that going public with them would have weakened its hand.
"Because one of the things I've said before is it's greed that got us into the mess and it's greed that got us out of it." — Chris Stansbury
What closed it was an alternative deal late in the process that would have cleared the alleged default in one part of the structure only. Stansbury used it as leverage to get the whole stack done. He was candid about the cost to some holders.
"I mean, this is it's the article that Bloomberg wrote about creditor on creditor violence. And this is probably the largest example of it." — Chris Stansbury
Once the hyperscaler contracts were signed and the consumer business went to AT&T, deleveraging moved quickly.
4. The Most Hated Man
A host noted Stansbury stayed on the conference circuit throughout, frequently as the most disliked person in the room, and asked how he managed it.
"It was awful. I mean, candidly, it was awful. It was probably the most challenging time in my career" — Chris Stansbury
He gave two reasons for staying visible. The first is that a CFO's job is credibility, which he defines as telling people what he can when he can. The second is that thousands of employees were being asked to take risks the company had never taken, and he thought he had to show up the way he was asking them to.
His answer at a JPMorgan credit conference about his own pay became the illustration.
"If this works, and we believe it will, then I'll live a life in retirement I never thought I'd live. And if it doesn't, I'll live a life in retirement I never thought I'd live." — Chris Stansbury
"And in fact, at that same conference, I found out a year ago that that night at the bar, investors were taking bets on how long it would be until we filed Chapter 11." — Chris Stansbury
Asked what transfers to other companies, he said the sequence only works with clarity on the destination, patience for a process that runs two steps forward and one back, good advisers, and transparency with the board, the employees and investors in that order.
5. Holding the Employees
A host asked how he stopped people leaving while Lumen was in the headlines daily. Stansbury said the harder task was recruiting the technical people the digital plan needed, not just retaining the ones he had.
He could not disclose the reason for his confidence, so he communicated the confidence itself, plus an honest read of the coverage: much of what appeared in the press came from leaks by the other side and was shaped to produce an outcome, and Lumen had chosen not to respond in kind. He said he told people it could run a long time and deliberately did not over-promise the timing.
6. Who Owns the Stock Now
Asked what investors say now that the debt has rallied and the name has gone quiet, Stansbury said lenders remain his best-informed holders, because they read the financials and the milestones closely and are underwriting the long-term health of the business rather than the quarter.
The debt had to re-rate before the equity could move, and the equity register is now shifting from passive to active and from hedge funds to long-only money.
His complaint is about coverage of the mix. The sell side, he said, remains too focused on the shrinking legacy half, which drags reported total revenue, while 53% of revenue grew 14% last quarter.
"So there's noise in the interim as we continue to have one foot in the old world and one foot in the new, but all of our investment focus, all of our sales focus, all of our innovation focus is on the new." — Chris Stansbury
7. Fully Funded Capex
Asked what financing he is considering by market, currency or instrument, and whether being conservative is its own risk while AI borrowers raise in size, Stansbury said nothing is in the works. Lumen laid out at its February investor day that capex is fully funded from operations for five years, which he said takes leverage from roughly four times adjusted EBITDA down to the low threes.
The other work has been simplification: far fewer tranches, a structure cut from super-priority, first lien, second lien and unsecured down to secured and unsecured, and one externally reported entity in place of three. He said creditors had reasonably looked at Lumen as three companies while he was trying to run one.
On ratings he said investment grade would be good and that the debt already trades well above where the agencies have it, so creditors are looking past them. He expects upgrades in the coming year, noting agencies are quick down and slow up.
8. Alkira and East-West
Stansbury described the old network business as north-south: premise to premise, premise to cloud, premise to data center. That market is growing at under 1% a year, he said, while the data moving across it grows in double digits. His word for that gap is price compression.
What the network could not do was east-west: moving data between clouds and between data centers, in any direction, independent of which carrier's fiber it runs on. Lumen bought Alkira in July for $475 million to get it, which he said pulled the timeline in by two years against building it.
"And so the vision was to effectively cloudify telecom, make it easy to consume on demand, and give customers the opportunity to turn it on, turn it off, things that had never been considered before." — Chris Stansbury
He was emphatic that the hyperscaler deals matter for reasons beyond the cash. Building for them means building for Lumen at the same time, and being co-located with their networks produced the multi-cloud gateway product: high-speed direct connection from a customer's premises into a cloud without routing through a third-party data center and paying interconnect fees.
"So we're going from 12 million fiber miles in 2022, I think it was, to about 58 million miles in 2030." — Chris Stansbury
9. Mining the Old Copper
Asked what success looks like, Stansbury named adoption metrics on the network-as-a-service product, meaning customers and ports, which he said are running ahead of the company's own expectations, and growth in the east-west layer.
The second half of the answer is retiring the past faster. The legacy business exists to generate cash, and he said the cash is shifting from revenue to the elimination of capex on end-of-life equipment, and to selling the copper itself.
"And by the way, that copper is some of the purest copper on the planet because it was put in the ground decades ago and wasn't mixed with other stuff." — Chris Stansbury
A host, who disclosed having covered the copper scrap market himself thirty years ago, asked for the tonnage. Stansbury said Lumen has not quantified it, because copper is heavy and transport dominates the economics. He put the value at hundreds of millions of dollars, said the copper price is more tailwind than risk, and noted that the more operators mine at once, the more reclamation centers get built, which cuts haulage and widens the radius worth recovering. AT&T and Verizon, he said, are ahead of Lumen on this.
He also said hundreds of millions of dollars of capex still goes into keeping copper services running each year, which has been the correct economic decision until now and is close to no longer being one.
10. Not All AI Is Good AI
Asked about the political argument around AI, Stansbury split his answer between his own company and the market.
Internally, Lumen pushed hard for adoption and got it. The next phase is subtraction.
"Now we're saying, hey, wait a minute, not all AI is good AI. It's not all economical." — Chris Stansbury
Some deployments helped one person or one team without covering the token cost. The second internal issue is governance: any agent that touches customers or suppliers reports to a human, and someone has to own what it can reach and for how long. He described an agent as the hardest employee anyone has ever had to manage.
On the public argument, he relayed a comparison someone made to him before the recording, between AI and the industrial revolution, and said it is the best framing he has heard.
"We do not have the option as a society to decide whether or not we want to do AI. National competitiveness, national security is on the line. We have to do it." — Chris Stansbury
He added that the coverage is dominated by regulation and by which neocloud or data center operator wins, while the part that matters to him is enterprise consumption, which he expects to be far less volatile.
11. Low Exposure to a Bust
A host put the sharp version to him: sentiment has turned from full steam ahead to hostility toward data centers, so how exposed is Lumen if projects slip and capex gets pulled?
"Our exposure is actually quite low because we're not focused on the construction phase." — Chris Stansbury
Lumen is laying fiber inside conduit it already owns and has said publicly it will not build new networks, because new routes earn returns close to the cost of capital. Growth is tied to enterprise adoption of AI rather than to the buildout, which he treats as the lower-risk side of the trade.
Asked whether the conversation would be different without AI, he said yes, but only on pace. The friction in cloud consumption was always the network, and AI is making the existing problem more visible and more expensive to leave alone.
Bonus Insights
On data centers in orbit, he called it an opportunity rather than a threat: anything on a satellite or a tower has to reach fiber at a ground station, and the extra layer is one more thing an enterprise has to stitch together. "There's margin in complexity"
He said his capacity to invest is limited by how much innovation Lumen can bring to market at once rather than by money, and that the balance sheet is there so the company can move when the right acquisition appears
Lumen committed to returning to EBITDA growth this year in total, and to enterprise revenue growth by 2028; faster growth pulls leverage down faster
He said Lumen never believed it had the right to win in consumer, with no wireless product and coverage in 16 states against the convergence of wireless and home fiber, and that the sale of that business to AT&T delivered the largest single piece of the leverage reduction
He named Black Lotus Labs, Lumen's threat-intelligence unit, among the proprietary assets that would have supported the turnaround even without monetizing spare capacity
On what surprised him about creditors: nothing about the asks, only the stamina. "So they will extract the last penny. That's their jobs"
Asked whether restructuring advisers have tried to hire him, he said no, and that turning them down would be easy
Stansbury's bottom line is that the restructuring bought Lumen the time and the capital to sell a network that behaves like cloud, and that the payoff comes from enterprises adopting AI rather than from the data center construction cycle.
Products, Companies & Tools Mentioned
Lumen Technologies (The company, rebuilt out of CenturyLink and Level 3 and now selling an on-demand enterprise network)
Alkira (Acquired in July for $475 million for east-west, carrier-agnostic connectivity between clouds and data centers, pulling the roadmap in by two years)
AT&T and Verizon (AT&T bought Lumen's consumer business, the largest single contributor to the leverage reduction; both are ahead of Lumen on retiring copper)
Level 3 and Qwest Corp (The two well-secured borrowing entities inside the old capital structure, against a weakly covered parent)
Black Lotus Labs (Lumen's threat-intelligence unit, named as a proprietary asset)
Multi-cloud gateway (The product that came out of being co-located with hyperscaler networks: direct high-speed access into a cloud with no third-party data center and no interconnect fees)
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