Charter Communications' bank debt ticked up into the 951/4 953/4 range following the company's announcement that it is offering $1.7 billion of senior notes and anticipates $500 million of the proceeds to pay down the company's credit facilities. But the loan had fallen back to its pre-announcement levels in the 941/2 95 context by week's end, noted one dealer. Investors "are not 100% sure what is going to get paid back," a trader said, noting that Charter has a number of different facilities.
The dealer noted that if the company were to spread out the payment evenly the effect of any pay down would be virtually unnoticeable. As of March 31, Charter had roughly $8 billion of credit facility debt, according to the company's most recent 10-Q. Still one trader noted, "We have seen more interested buyers."
Charter also intends to direct part of the proceeds from the financing to tender up to $1.106 billion of the company's convertible senior notes for roughly $900 million. A tender offer will also be extended to some of the senior notes and senior discount notes held by the indirect subsidiary, Charter Communications Holdings. This offer will tender $285 million of debt for about $230 million. Calls to a Charter spokesman were not returned.