Qwest (Q) plans to borrow $1.25 billion to help it redeem some debt.

The refinancing move helps retire $400 million worth of notes that were due this year, and a $504 million senior note that carried a 13% interest rate. Qwest says it will use the new cash for general business purposes and pay down or refinance debt.

With its $9.7 billion offer snubbed by

MCI

(MCIP)

in favor of an $8.4 billion bid from

Verizon

(VZ) - Get Report

, Qwest has embarked on a new growth plan. The Denver phone giant has said it will shift its focus to picking up smaller phone network assets.

CEO Dick Notebaert has said that he expected to find some buying opportunities in the divestitures that regulators force merger partners Verizon-MCI and

SBC

-

AT&T

to unload.

There has also been speculation that Qwest is sniffing around failed Reston, Va., telco

XO Communications

(XOCM)

. XO sells communications services to businesses, a market that Qwest has been eager to expand on. Qwest lost a bidding war to XO for bankrupt upstart telco

Allegiance

early last year.

Qwest shares were down 2 cents Tuesday at $3.73.