Qwest Amends Credit Facility; Boosts Stock

Qwest Communications International

After the deal was announced, Qwest's stock rose nearly 5 percent to $3.77 per share Wednesday from a previous close of $3.60 on Tuesday.

By Thursday afternoon, the carrier's shares were trading at $3.53.

The deal eases guidelines for cash flow vs. debt. Under a prior agreement Qwest's debt could not be four times greater than its cash flow. With the new guidelines, Qwest's debt can now be no more than six times its cash flow.

"Coupled with the pending sale of QwestDex, these actions . . . and the cash flow from our operations should provide us with enough funding for the next several years and put any liquidity concerns behind us," said Oren Shaffer, Qwest vice chairman and CFO, in a statement.

The renegotiation of its credit facility requires Qwest to use a portion of the money from the sale of its QwestDex directory business to decrease the facility to $2 billion. This amount is expected to decrease further to $1.25 billion with the close of the QwestDex sale.