Brightspeed prepares for a possible December bankruptcy amid fibre-financing struggle
Brightspeed is preparing for a possible bankruptcy filing as soon as December, the Wall Street Journal reports. WSJ says it has struggled to raise asset-backed fibre financing and is seeking fresh capital from existing lenders.
Brightspeed is preparing for a potential bankruptcy filing as soon as December, WSJ Pro reported on 29 October. It cites people familiar with the matter. WSJ says Brightspeed's liquidity is dwindling and that it is seeking fresh capital from existing lenders. This is a report of preparation, not a filing.
The Apollo-backed broadband provider has struggled to raise money from new investors through an asset-backed financing, WSJ says. WSJ says the proposed financing would be secured by subscription cash flows from the new fibre network and used to fund further fibre expansion.
9fin reported on 10 September, citing its sources, that Brightspeed and Apollo were considering an asset-backed deal. 9fin said it would structurally prime existing lenders without paying down term loan debt. 9fin's sources described it as Apollo's only viable path under the credit agreement. 9fin reported that Brightspeed had issued a going concern warning with its second quarter 2026 results.
9fin said the first-lien first-out lenders were organised with Gibson Dunn and Moelis. The second-out lenders used Davis Polk and Centerview. Brightspeed worked with PJT Partners. In 2024, 9fin reported that Brightspeed raised $3.65bn of new money and exchanged secured debt into second-out and fourth-out debt at what 9fin called a 23 percent discount.
Octus research puts gross debt, before any cash is netted, at $12.5bn in March 2026. Octus says Brightspeed has burned $5.6bn of cash since the 2022 acquisition.
S&P set out a recovery waterfall in its release of 20 August 2025, after Brightspeed added $1.6bn of first-out notes. It is a stress scenario on S&P's assumptions at that date, not a current bankruptcy recovery estimate. S&P lowered the rating on that first-out debt to CCC+ from B-. The issuer rating stayed at CCC+ with a negative outlook.
In its simulated 2027 default, S&P assumed an emergence enterprise value of $3.5bn, equal to 4.5 times $778m of EBITDA. S&P estimated first-out recovery at about 60 percent. Its estimate for second-out and unsecured recovery rounded to 0 percent, with a recovery range of 0 to 10 percent.
Ranking is one driver of those recoveries, alongside S&P's assumed value and the size of each claim. The proposed financing could weaken existing lenders' position, but the amount and collateral are not public here, so its effect on S&P's August 2025 estimates cannot be quantified.
Preparation is not a decision. WSJ's wording is "potential" and "as soon as December". WSJ says a filing could come as soon as December. Two developments would show which way it went: an announced lender agreement on fresh capital, or a bankruptcy petition on a court docket. One would not necessarily preclude the other.