Bondholders Move to Resist Covenant Stripping From Lumen’s Qwest

Some bondholders to Lumen Technologies’ Qwest Corp. unit have organized with law firm Davis Polk & Wardwell after the enterprise network giant kicked off a debt swap that would remove their lender protections, according to people familiar with the matter.

Lumen is seeking to swap roughly $1.64 billion of Qwest’s bonds due in 2056 and 2057 into new securities at par with the same coupon and maturity — a move that would also strip away almost all of the debt’s covenants. Negotiations between the Qwest bondholder group and Lumen center on strengthening a parent-company guarantee for the debt and shortening the maturity of the new bonds, the people said, asking not to be identified discussing private information.