Bloomberg Audio Studios, Podcasts, radio News. You're listening to Bloomberg BusinessWeek with Carol Masser and Tim Stenoveek on Bloomberg Radio. It is time for another edition of the CFO of Briefing. This week we are joined by Chris Stansbury, chief financial Officer and EVP of the Louisiana based publicly traded global communication services company Loomen Technologies, marketcap of about six point eight billion dollars shares so far this year, up more
than twenty five percent. Also with us here in the studio is Nina Trentman, Bloomberg News Senior Editor. She writes the CFO Briefing newsletter. You can subscribe to it at Bloomberg dot com slash CFO Dash Briefing. Chris is featured in the most recent edition of the newsletter. Chris joins us from Denver. Chris, welcome the company divesting non core assets. For example, earlier this year announcing the sale of its mass market residential fiber unit to AT and T for
five point seventy five billion dollars in cash. Now, what you're planning to do is leasing existing fiber routes to hyper scalers and social media companies to transport AI traffic between data centers. I want to know how big of an opportunity is it to lease to these hyperscalers.
Yeah, thanks for having me today. It's been quite a journey at Luhman over the last three and a half years. And really what we see as an opportunity and have seen really through our transformation is the AI multi cloud world that's being developed right now. The network of yesterday wasn't built to support it. And if you really think about the economics of AI and the economics of a GPU, you want to keep that GPU fed as much as it can consume so that they're spinning constantly, and that's
where you get the economic benefit. So the problem with the network that has existed so far is that as those data get spread further and further away, as data centers are in search of power and cooler temperatures, there's latency problems and there's access problems. It takes a long time for networking to adjust. So what we're doing is building a mesh that basically goes anywhere to anywhere where the customer on demand can move those workloads where they
need them in super low latency manner. So that's the big change, and so it's not just hyperscalers, it's really the full connectivity between the hyper scalers running those clouds, the hyperscalers obviously building those AI algorithms, and large enterprise customers who are on the AI journey now and we'll be using it much more heavily in the future.
Chris, thanks for joining us again. It's great to chat. Just wondering with the AT and T deal and also what you've been done in capital markets in recent weeks. You've really improved your financing structure. You're saved one hundreds of millions in interest expenses a year. Talk to us a little bit about that.
Yeah, if you go back in time when we all joined Lumen and saw this opportunity, the balance sheet was not our friend. We had a lot of debt. Half that debt was due in one year. It was due in twenty twenty seven, and that was job number one. We really needed to strengthen the foundation of the company so that we could go do the things that we're executing against today. So that was really accomplished through a
couple of things. One is we did the largest out of court debt restructuring in history that's not quite two years ago, and that allowed us to push those maturities out a bit, but at a significant expense. Our annualized interest expense at that point was about one point four
billion dollars. But from there we saw in the middle of those negotiations, we saw this opportunity with the hyperscalers, and soon after that that debt negotiation was completed, we signed eight billion dollars worth of deals and that has
grown since. That allowed us to monetize an asset that has been in the ground for twenty five years, which is conduit that we can blow fiber through to meet the needs of the hyperscalers in a fairly short period of time versus building new and that's really the core enduring advantage of this business. And then we layer the
digital on top of that. But the cash from those deals allowed us to refinance and delever, so we've made a number of moves so far this year, and with the sale of the consumer fiber business to AT and T when that closes, our debt will be down to just over thirteen billion dollars in Our interest expense on an annualized basis will be about seven hundred million, so in a two year period, dramatically reshaping both the quantum
of debt as well as the maturity curve. And now that balance sheet is a real asset for US as we invest in the AI multi cloud world.
Yeah, IM actually wondering about the investments. Of course, there's a lot of campex that's required in a business like yours. We've seen earlier this year the One Big Beautiful Bill Act that was passed, which tries to encourage investment, including in capital investments, by allowing USCFO to depreciate certain investments faster, Like do you think this will make an impact as you're thinking about future investments in your business here in the US.
Definitely. If you go back to the twenty seventeen legislation that the big problem with that legislation is is it created an unequal playing field between say, more service oriented or asset light companies and asset heavier infrastructure companies. And if you look at where the administration is focused today, it's clearly around infrastructure. I think the US has the biggest challenges really is making sure that we don't get
too far behind with our infrastructure. So the recent legislation has leveled that playing field, and really that was around two things. The first is is that there was interest deductibility limits that used to exist that have been relaxed dramatically because again, asset heavy infrastructure companies tend to have higher leverage. And then to your point, the ability to accelerate depreciation to help on the tax side is significant.
That reduces the risk that companies that are investing in infrastructure take on when they make those kinds of investments. So it's absolutely an opportunity for us.
Chris cann have to leave it there, but you've got to come back and join us once again. And I do remind everybody that Chris is featured in the most recent edition of the CFO Briefing newsletter. You can sign up for it at Bloomberg dot com slash CFO Dash Briefing. We've been speaking with Chris Stansbury, CFO and EVP of Luminant Technologies also joining us here in the studio. Nina Trentman, Bloomberg News Senior Editor. Sign up for that CFO Briefing newsletter.