The primary market was somewhat uninteresting to many investors last week, as they chose not to participate in new issues. Here are some deals in which investors did have at least some interest.
* St. Louis-based Charter Communications, the cable-television company, plans to sell $1.5 billion of senior notes. Proceeds from the offering will be used for Charter Communications Operating and Charter Communications Capital units. One high yield investor said the deal is another step for Charter in its global re-capitalization effort. The company is looking to extend out maturities with the eight-year and 10-year notes. He says price talk may be about 8% to 8 1/4%, which is comparable to Charter's other existing senior debt. Some investors feel the new issue may not do too well and stated that it's a very big deal and a big chunk for the market to swallow but that it's certainly a barometer for liquidity in the market. Another noted that investors are loaded with this name, but not at a senior level, which this deal will offer, adding that a lot of people own Charter bonds at subordinate levels which are far riskier. In this respect, he feels the deal may go through smoothly. Standard & Poor's assigned a single-B minus rating to the deal, with Moody's Investors Service giving it a B2 rating. Lead manager J.P. Morgan Securities along with Banc of America Securities, Citigroup Global Markets and Credit Suisse First Boston are underwriters.
* Distressed buyers were taking a look at unrated Invista, a textile maker owned by Dupont Co. The company plans to sells $575 million of 10-year notes. A portion of the debt will be raised in euros to provide capital for Invista subsidiaries in Europe. Ron Bringewatt, distressed analyst at The Seaport Group, said Invista is an interesting company for distressed investors, noting that it is a similar company to Solutia Corp., which is currently in bankruptcy, and investors are curious to see how the market reacts to the Invista deal. If Invista tells a good story and looks optimistic, he said, that argues for higher prices on Solutia as well. Bringewatt added that Dupont is probably assuming the liabilities of Invista, including environmental liabilities and pension costs. J.P. Morgan Securities is underwriting the deal.