Lumen Technologies was downgraded to B2 from Ba3 by Moody’s. The rating agency highlighted governance weakness as one of the reasons as the company departed from its prior financial strategy and risk management practices. Here, Lumen’s significant disposals of high margin non-core businesses in 2022 saw its operating scale drop. This also led to lower margins, EBITDA and increased leverage. Also, they cited Lumen’s inconsistent track record evidenced by the “prolonged difficulties meaningfully lowering revenue contraction rates across its business segments”. Moody’s added that Lumen will have to execute well on its turnaround strategy that can help deliver solid revenue and EBITDA growth inflection beginning in 2025.

Lumen’s bonds were among the top weekly losers with its 6.875% 2028s down 7.3% to 63.5, yielding 18.5%

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