Brightspeed, the broadband provider backed by Apollo Global Management, is negotiating with major creditors over financing options that could provide fresh capital for its fiber-network expansion while reshaping the repayment priorities inside one of the telecommunications sector’s most heavily leveraged capital structures.

Apollo is pursuing a private asset-backed securitization facility as part of those discussions, The Wall Street Journal reported. The financing could be provided by outside investors or some of Brightspeed’s existing lenders, with proceeds potentially used either to reduce first-lien, first-out obligations or to continue financing construction of the company’s fiber network. Paul Weiss Rifkind Wharton & Garrison is advising Apollo on the financing discussions.

The negotiations put structured finance at the center of Brightspeed’s attempt to bridge the gap between the substantial capital still required for its fiber strategy and the financial pressure created by its existing debt. An asset-backed structure could allow lenders to underwrite a pool of subscription-related cash flows generated by fiber customers rather than relying solely on the credit profile of the broader corporate borrower.

That distinction is important for both Apollo and Brightspeed’s creditors. Financing secured by sufficiently identifiable assets or contracted cash flows can attract capital on terms that differ from conventional leveraged loans, particularly when the operating company itself has high leverage. But adding a new senior financing layer can also create difficult negotiations over collateral, repayment priorities, restricted-payment provisions and the value remaining for creditors sitting lower in the capital structure.

Brightspeed’s financing challenge reflects the economics of a large-scale telecommunications conversion. Apollo acquired the legacy local-exchange operations from Lumen Technologies in 2022 in a transaction valued at approximately $7.5 billion, creating Brightspeed from networks serving communities across 20 states. The investment thesis depended substantially on replacing aging copper infrastructure with higher-speed fiber connections capable of producing more durable broadband revenue.

The transition has required billions of dollars of investment before customer adoption can generate sufficient recurring cash flow. Octus estimated in August that Brightspeed had burned about $5.6 billion of cash since the acquisition while passing roughly three million locations with fiber. The credit-research firm put gross debt at about $12.5 billion as of March 2026 and said deployment costs had materially exceeded the assumptions made around the original acquisition.

The financial pressure is compounded by the erosion of the copper business that Brightspeed is replacing. Legacy telephone and broadband customers can disconnect faster than newly constructed fiber locations convert into paying subscribers, creating a period in which capital expenditures remain high while total company revenue can continue falling. Competition from cable operators and fixed-wireless services also affects pricing and customer acquisition in markets where Brightspeed is deploying fiber.

Octus estimated fiber penetration at roughly 20% in August, substantially below the longer-term assumption incorporated into the original investment case. It also said Brightspeed was offering fiber service at pricing below the average revenue per user modeled at underwriting, while copper customer losses were outpacing fiber additions and weighing on revenue and earnings.

Those operating trends have turned liquidity into an increasingly important variable. Bloomberg reported on September 1 that Brightspeed had included a substantial-doubt going-concern warning in financial information provided to investors. The company reported second-quarter revenue of $386 million, down 8.7% from the prior-year period, and told debt investors it was considering financing alternatives including an asset-backed securitization.

The warning does not by itself mean a restructuring or bankruptcy filing is inevitable. Companies can resolve going-concern uncertainty through new financing, asset sales, sponsor support, liability-management transactions or improvements in operating cash flow. Brightspeed’s current creditor discussions are therefore significant because successful financing could extend the period available for its fiber build to generate a larger subscriber base and stronger recurring revenue.

The company has already completed a major balance-sheet intervention. In August 2024, Brightspeed announced a transaction with its secured lenders and Apollo-managed funds that provided approximately $3.7 billion of new capital and eliminated roughly $1.1 billion of debt through amendments to existing loan and credit facilities. Brightspeed said at the time that the additional capital would support its multi-year fiber program and improve its ability to pursue federal and state broadband subsidies.

That transaction demonstrated substantial support from Brightspeed’s financial stakeholders, but the continuing pace of capital expenditure has kept funding requirements elevated. The company has progressively expanded its fiber ambitions as it seeks to convert enough of its overall service territory to modern infrastructure to change the economics of the business.

For creditors, the question is no longer simply whether Brightspeed can construct valuable fiber assets. It is whether those assets can generate enough customer revenue quickly enough to support the debt that financed the transformation. Fiber networks typically have long useful lives and can produce recurring subscription revenue, characteristics that make them potentially attractive collateral for asset-backed investors. The timing mismatch between construction spending and subscriber ramp, however, can create severe liquidity pressure during the build phase.

That is where the proposed asset-backed financing could become strategically important. Instead of relying exclusively on another general corporate loan, Brightspeed could segregate qualifying fiber-related assets and cash flows into a financing structure designed to offer investors stronger collateral coverage. For Apollo, such an approach could broaden the investor base beyond conventional distressed or leveraged-loan buyers. For existing creditors, however, the details governing collateral transfer and repayment priority would be critical to assessing recovery values.

The creditor groups are already differentiated by where they sit in the repayment waterfall. Octus reported that holders of Brightspeed’s first-out term loans were working with Gibson Dunn & Crutcher, while certain second-out lenders were represented by Davis Polk & Wardwell. Brightspeed itself had retained Akin Gump Strauss Hauer & Feld and PJT Partners as advisers. The presence of separate adviser groups reflects the competing economic interests created when a heavily leveraged borrower considers adding new capital.

Credit-market pricing has also signaled different recovery expectations across the debt stack. Octus reported in August that first-out term loans were trading at about 92.5 cents on the dollar, compared with roughly 67 cents for second-out term loans. Senior secured notes were quoted near 98, producing a wide valuation gap between creditor classes and indicating that investors were assigning substantially different risk to claims depending on their position in the capital structure.

A new financing therefore has several possible functions. It could inject liquidity directly into the construction program, refinance expensive or restrictive obligations, extend Brightspeed’s runway to complete more fiber connections, or accomplish some combination of those objectives. Each approach would have different implications for leverage and recoveries. A financing used primarily to repay existing senior debt could improve the maturity and liquidity profile without necessarily delivering the same amount of incremental construction cash. Conversely, financing directed heavily toward network expansion would preserve more operating runway but leave more existing debt outstanding.

The value proposition depends heavily on whether additional construction creates assets worth more than the capital required to complete them. Brightspeed operates in many rural and suburban markets where fiber infrastructure can command strategic value because building a competing network requires significant capital and time. Government broadband programs may also reduce the private capital required to reach certain underserved areas.

Brightspeed said in its 2024 restructuring announcement that approximately $4.7 billion in Broadband Equity, Access and Deployment program funding was available across states in its footprint, subject to eligibility and other conditions. Public subsidies can improve project economics, although awards generally cannot substitute immediately for all of the liquidity required to maintain a rapid construction schedule.

Octus estimated in August that Brightspeed had about $2.2 billion of liquidity as of March 31 and said cash burn was expected to remain substantial during 2026 before falling as the network approached its targeted scale. It also identified potential broadband grants and lower capital spending as factors that could extend the company’s liquidity runway.

The financing talks therefore represent more than a conventional refinancing exercise. Apollo is effectively trying to match a long-duration infrastructure asset with a capital structure capable of surviving the expensive construction and customer-ramp period. For lenders, the negotiations involve deciding whether supplying additional capital increases ultimate enterprise value enough to justify the risks associated with a larger or differently secured financing package.

The situation also underscores the expanding role of asset-backed finance in private markets. Private-equity sponsors, alternative asset managers and banks increasingly use structures tied to receivables, contracts, leases and other pools of cash-generating assets to finance businesses that may have limited capacity for additional conventional corporate borrowing. Telecommunications infrastructure is particularly suited to such analysis because individual networks can generate measurable recurring subscription revenues once customers are connected.

But asset-backed financing does not eliminate operating risk. The value of Brightspeed’s collateral still depends on subscriber penetration, customer retention, pricing, construction execution and competition. Fiber infrastructure can have strong strategic characteristics while the company owning it remains financially strained if debt service and capital expenditures absorb cash faster than subscriber revenue grows.

For Apollo, preserving flexibility is especially important because the eventual value of Brightspeed could depend on completing enough of the fiber transition to make the company more attractive to strategic or financial buyers. Octus said Apollo was accelerating construction toward five million fiber passings, representing a substantial majority of Brightspeed’s total footprint. Achieving that scale could materially alter the mix between declining copper assets and newer fiber infrastructure, though the credit-research firm cautioned that weak operating trends could complicate a sale.

For existing lenders, the immediate focus is likely to remain on the terms of any new money: its collateral package, ranking, interest cost, permitted uses and protections for current creditor classes. Those provisions will determine whether an ABS transaction is viewed primarily as an enterprise-value-preserving liquidity solution or as a financing that shifts value toward a new senior creditor group.

No completed financing had been announced as of the reported discussions, and the size and final structure remain subject to negotiation. The absence of a finalized transaction means multiple outcomes remain possible, including capital from existing lenders, third-party investors or a combination of the two.

What is clear is that Brightspeed has reached another important financing juncture. The company has built a substantial fiber asset base, but the pace of investment needed to complete its network remains demanding relative to its current cash generation. Apollo’s proposed asset-backed financing offers a potential route to monetize the credit quality of the newer fiber infrastructure without waiting for the entire corporate balance sheet to improve.

The negotiations will determine whether that financing can be structured in a way that gives Brightspeed sufficient liquidity to continue construction while maintaining enough support among competing creditor groups. For the broader credit market, the outcome will be another test of whether asset-backed private capital can provide an effective bridge for highly leveraged infrastructure businesses caught between large upfront investment requirements and the slower emergence of recurring operating cash flow.