Charter Communications' operating company "B" loan traded as high as the 951/4 range before settling down to the 9495 context following the company's announcement that it is pursuing a debt exchange. Charter and its indirect subsidiary CCH II have entered into agreements to purchase an aggregate of $609 million in convertible senior notes and $1.3 billion of senior notes and senior discount notes in private transactions with a number of institutional investors. CCH II will issue $1.6 billion of 101/4% notes due 2010 to support the exchange.
Charter has also entered into an agreement to sell various cable television systems to Atlantic Broadband for about $765 million. The planned asset sale will provide for $3,200 per subscriber, said one trader. The proceeds from the sale, $91 million from a previous asset sale and $300 million of debt discount from the exchange have allowed the company to raise approximately $1.1 billion for debt reduction, explained Carl Vogel, Charter's president and ceo, in a Sept. 19 conference call. It could not be determined if any of the proceeds from the recent transactions would be directed toward the bank debt. The bank debt is certainly not performing in a way that indicates the market expects a pay down, said one buysider. Calls to a company spokesman were not returned.