Charter Communications' bank debt was up about a point and the bonds were up several points last week on the news that the company has sold various cable television systems for $765 million. Traders said the company's "B" loan was being quoted at about 941/2. Despite the positive news, several traders explained the bank debt struggles to go higher as there as so few natural buyers. "Everybody owns it, so maybe trading desks could buy it," one trader said. Charter has about $7.8 billion in bank debt under its Charter Operating, CC VI, Falcon Cable and CC VII Operating entities, according to company filings.
The sell-off was part of a previously announced strategy to divest certain geographically non-strategic assets. "Proceeds from this cash sale [will] be used to repay bank debt and fund future capital expenditures," said Charter President and CEO Carl Vogel in a statement. A Charter spokeswoman declined to specify which tranches would be paid down.
Last month Charter was pursuing a $1.7 billion proposed note sale, but the increase in yield for the benchmark 10-year Treasury and mutual fund outflows made the transaction economically unattractive for the company, according to a company statement. Approximately $500 million of the financing had been earmarked to pay down one or more of Charter's credit facilities.