CenturyLink (CTL) is taking care of any long-term cash obligations it may have by buying debt tender notes from its wholly-owned subsidiary, Qwest Corporation. The due dates listed, as per the filing, are 2015 and 2016 respectively. Since over $800 million in debt tender notes sold for over $1 billion, I believe these notes will accrue enough interest to be valuable to CenturyLink. Also, since Qwest Corporation is already a subsidiary of CenturyLink, I don’t see this as a high-risk move. The money is already on its balance sheet. If anything, it is a huge asset transfer, essentially. This is probably going to hurt its stock price initially, however, as CenturyLink allows interest to accrue or sells series of notes. The price will reestablish itself and then will be in a position to begin climbing. The stock is currently trading around $38 per share, and I believe we have not seen a ceiling for CenturyLink, as it is currently the third largest telecommunications firm in the country.
I believe CenturyLink will face stiff competition from its rival in the business, AT&T (T). AT&T recently tested its new 4G LTE network in 13 cities across the country. The network showed to have download speeds that are nearly twice that of competitors. This is an obvious and tangible improvement over past networks, which could definitely translate to growth and increased revenue in the future. Its stock price currently sits at just above $30, only one dollar under its 52-week high.Â To continue reading, click here.