Charter Communications' debt traded this week at 98 ¼ in a $2.5 billion trade. Dealers cite the company's financial standing and a lack of new issue as the prime reasons for the interest. Matched against the debt of competitors such as Global Crossing and McLeod, which are both trading in distressed range, Charter looks solid, dealers said. Moreover, "There's no new issue and people are dying for paper," said a trader. Another credit pumping up on the low new issue is Adelphia Communications, which traded up to 98 7/8 from 98 ½ last week. Calls to Kent Kalkwarf, cfo at Charter, were referred to Mary Jo Moehle, director of investor relations, who declined to comment.
In late October, Charter's debt began to trend upwards in a 97 3/8 trade, after being slowed briefly by Adelphia's new issue flooding the market [LMW, 10/21]. By November, the company issued operating cash flow growth resulting from continued consumer demand for broadband services. For the third quarter revenue increased more than 13% to $1.04 billion, while operating cash flow increased more than 10% over 2000 to $467.5 million. Charter has a $540 million deal that breaks down into three tranches and expires in 2007. Pricing is LIBOR plus 2 ¾%. TD Securities is the lead arranger.