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Announcement:

Moody's Changes the Outlook on TW Telecom Inc. Debt from Stable to Positive

11 Nov 2010

New York, November 11, 2010 -- Moody's Investors Service has changed the ratings outlook on tw telecom inc.'s ("TWTC" or the "Company ") debt to Positive from Stable, reflecting the Company's continuing good execution of its business plan which is driving leverage lower and is generating growing free cash flow. As part of the rating action, Moody's also affirmed the B1 corporate family and probability-of-default ratings of TWTC, and its SGL-1 liquidity rating, including the ratings of the existing debt instruments at TWTC and at its wholly owned subsidiary, tw telecom holdings inc. ("TWTH").

Moody's also notes that the company has commenced an amendment process with its lenders to extend the maturity of its senior secured credit facilities and obtain more operating flexibility under those agreements. Specifically, the $80 million revolver will be extended to 2014 from 2011, and the $578 million term loan will be extended to 2016 from 2013. While the transaction is not expected to impact TWTC's credit metrics, the extended maturity of a significant portion of its debt will enhance the Company's already very good liquidity. Moody's believes that a successful execution of the amendment will better align the Company's debt maturity profile with its assets, which are mainly long-term.

Moody's has taken the following rating actions:

At tw telecom inc.:

Outlook -- Changed to Positive from Stable

RATINGS RATIONALE

TWTC's corporate family rating is solidly positioned in the B1 rating category, which reflects the Company's track record of strong operating performance driven by the revenue growth in the enterprise segment and the Company's position as one of the largest competitive telecommunications providers, with a footprint covering 75 of the top 100 markets in the U.S. Despite the severe recession during most of 2009, and a slow recovery in 2010, TWTC was able to grow revenue in each quarter over that time frame, reflecting strong execution and the growing demand for Ethernet and IP-based products from enterprise customers. The Company's results reinforce its differentiated business model that relies on a fiber-rich network with over 11,000 direct connections to buildings and major customers, eliminating the need to rely on incumbent carriers for a critical portion of its last mile connections. TWTC carries the majority of traffic on its own network, which allows the Company to generate industry-leading EBITDA margins and the ability to bundle other telecommunications products and services, which in turn reduces churn. The rating is tempered by elevated levels of capital spending that are inherent to TWTC's business model, and the Company's challenging competitive position. Moody's expects the Company will continue to be a consolidator in the CLEC industry. However, we expect that future acquisitions will not materially alter the Company's leverage and operational risk profile.

Rating Outlook

The positive rating outlook reflects Moody's expectations that despite the challenging economic environment, TWTC's EBITDA will continue to grow, and coupled with expected moderation of capital expenditures should generate growing free cash flow.

What Could Change the Rating - Up

Upward rating pressure could develop if earnings growth and benefits from recent network investments lead to stronger free cash flow generation such that TWTC's free cash flow exceeds 10% of its total adjusted debt, and the Company's leverage (Moody's adjusted Total Debt-to-EBITDA) can be maintained below 3.0x.

What Could Change the Rating - Down

The rating and/or outlook is likely to come under pressure if TWTC's operating performance deteriorates due to increasing competition, changes in the regulatory environment or persisting weakness in the economic environment beyond our current expectations, such that leverage cannot be maintained below 4.5x.

The principal methodologies used in this rating were Global Telecommunications Methodology published in December 2007, Moody's Approach to Global Standard Adjustments in the Analysis of Financial Statements for Non-Financial Corporations - Part I published in February 2006, Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009, and Speculative Grade Liquidity Ratings published in September 2002.

Moody's most recent rating action for TWTC was on March 3, 2010, when Moody's assigned a B2 rating to a TWTH senior unsecured note issuance.

tw telecom inc., headquartered in Littleton, CO, provides data, dedicated Internet access, and local and long distance voice services to business customers and organizations in 75 metropolitan markets in the United States. The Company generated $1.3 billion in revenue for the trailing twelve months ended 9/30/10.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of maintaining a credit rating.

New York
Gerald Granovsky
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Alexandra S. Parker
MD - Corporate Finance
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.

Moody's Changes the Outlook on TW Telecom Inc. Debt from Stable to Positive
No Related Data.
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