Credit Analysis: Brightspeed’s Wide Funding Gap Heightens RX Risk; Costly Fiber Build Faces Weaker Monetization, Fixed Wireless Access Competition

Credit Research: Carl Myers Relevant Document: Brightspeed 2022 Offering Memorandum Brightspeed, an Apollo-backed fiber connectivity operator, is facing substantial capital expenditure spending as it continues to invest in its fiber network while its legacy copper business deteriorates. Since its 2022 acquisition, Octus estimates that the company has burned $5.6 billion while passing 3 million locations. This represents a significant cost overage as the initial build was expected to require only $3 billion for its 3.6 million passing target, as competition for qualified construction labor from cable operators and other overbuilders pushed deployment costs above initial expectations. Operating cash flow is declining meaningfully as copper churn outpaces the speed of fiber modernization. Moody’s Ratings projected revenue declines of 11% in 2025 and 6% in 2026, reflecting the timing mismatch between copper churn and the multiyear lag to build, market, install and monetize fiber. The resulting pressure is pushing EBITDA near zero, according to sources close to the matter. Creditors have organized to address Brightspeed’s capital structure amid persistent cash burn and heavy capex requirements, Octus previously reported. According to sources, the current situation may lead to a restructuring, potentially through an in-court process. Two ad hoc lender groups have formed: a[...]