EUR 8483.00 For Business Accounts Only

Brightspeed – Updating our model for 4Q25 and baking in new ABS assumptions

Following Brightspeed’s 4Q call on 4/8 and our note discussing the likelihood of the company accessing the ABS market, we are updating our model and valuations under two scenarios including 1) a ‘Complete build’, and a 2) ‘Capital constrained build’. Overall, our model update generates a modest valuation improvement under both scenarios. In the ‘Complete build’ scenario, our updated EV estimate of $10.5bn implies debtholders are completely covered through the "Fourth Out" TL (term loan). In the ‘Capital constrained’ scenario, our updated EV of $9.4bn fully covers debt through the “Third Out” DDTL (delayed draw term loan) with meaningful recovery on the "Fourth Out" TL (term loan) relative to current market prices. Where it begins to get tricky at the bottom of the stack is if the company is unable to execute a sale by YE27 and needs additional funding to hit its build-out goals. Stay tuned for our next analysis from the perspective of a strategic buyer, including convergence benefits and the cost to achieve synergies.