Qwest expects credit markets will allow 3.5% convertibles to be refinanced before maturity

By Jennifer Lanning Drey

Portland, Ore., Jan. 8 - Qwest Communications International Inc. has recently been forced by the closed credit markets to repay some debt it had previously planned to refinance, but the company continues to believe it will be able to refinance all or a portion of its $1.2 billion of 3.5% convertible senior notes, which mature in the fourth quarter of 2010, Edward Mueller, chief executive officer of Qwest, said Thursday.

"I do believe that there's going to be a market opportunity between now and the time that our convert comes due. And frankly, if there isn't, we've all got a bigger problem, I think," Mueller said while speaking at the 2009 Citi Global Entertainment & Telecommunications Conference in Phoenix.

The company's goal remains to refinance its regulated debt when the credit markets open and to pay off unregulated debt.

In 2008, Qwest repaid more than $300 million of debt that would have been refinanced in better financial markets. The company took down an additional $240 million of debt last week that also probably would have been refinanced, had the option been available, Mueller said.

Qwest's most recent guidance includes $1.5 billion of cash flow in 2009, and the company expects to keep capital expenditures flat.

Strategic priorities for 2009 will be a continuation of the company's focuses in 2008, which included providing a balanced return to shareholders and maintaining cost discipline.

"We're all cautious about the macro-environment, but we're pretty happy about what we've delivered in '08, and we think it will be more of the same in '09," Mueller said.

Qwest is a Denver-based telecommunications company.

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