Tear Sheet: Connect Holding II LLC (Brightspeed)

This report does not constitute a rating action. As of March 31, 2025, Brightspeed?s leverage was over 50x, and we expect it will remain elevated at above 30x for the next several years because of the rapid decline of its high-margin digital subscriber line (DSL) business, in which revenues are decreasing at more than 15% annually. While the fiber business is experiencing modest growth, it represents only 9% of total revenue as of the first quarter of 2025. We estimate it will take three to four years for Brightspeed to sufficiently offset declines from DSL with growth from fiber broadband services. Additionally, the company has about $8.3 billion in S&P Global Ratings-adjusted debt, with a substantial portion of its capital

...July 21, 2025 This report does not constitute a rating action. We continue to view Connect Holding II LLC's (dba Brightspeed) capital structure as unsustainable. As of March 31, 2025, Brightspeed's leverage was over 50x, and we expect it will remain elevated at above 30x for the next several years because of the rapid decline of its high- margin digital subscriber line (DSL) business, in which revenues are decreasing at more than 15% annually. While the fiber business is experiencing modest growth, it represents only 9% of total revenue as of the first quarter of 2025. We estimate it will take three to four years for Brightspeed to sufficiently offset declines from DSL with growth from fiber broadband services. Additionally, the company has about $8.3 billion in S&P Global Ratings-adjusted debt, with a substantial portion of its capital structure utilizing payment-in-kind (PIK) interest. Given the company's expected weak earnings and aggressive capital spending plans for the next several...

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