Charter Communications inched up toward 89-90 after the company announced that Paul Allen, principle owner of the cable company, has offered to provide a $300 million credit line to assist Charter in meeting certain covenants under its existing credit facilities. "What everyone wants to see is that Paul Allen is supporting the credit," said one trader of the uptick in the name. While the company is currently in compliance with all its covenants, one analyst speculated that the Allen credit might be put in place to give Charter's auditors comfort that the company has a cushion for at least another year. Charter paper traded in the 87 1/2 context two weeks ago.
In conjunction with a new audit to its previously released results, Charter also revealed that adjustments to reported revenue through the first three quarters of 2002, 2001 and 2000 will total $292 million, and adjusted EBITDA modifications will total $597 million for the same time period. Traders said, however, that the restatements were expected.
An analyst even suggested that the preliminary look at Charter's numbers was positive. Investors were concerned that the company was no longer growing, but the most recent results showed that for the fourth quarter of 2002 adjusted EBITDA is up about 14% compared to the same time last year, he explained. Calls to the company were not returned by press time.