A high-yield portfolio manager believes the bonds of Charter Communications are ready to begin climbing back, but a trader at another buy-side firm is not convinced. Brendan White, portfolio manager at Fort Washington Investment Advisors in Cincinnati, purchased some of the bonds last week. He says Fort Washington was never fully invested in the bellwether high-yield cable company, which was one of the priciest names in high-yield just a few months ago. "We had a small amount of exposure and were adding to it when the bonds ran away, so we never had a chance to build a real position," he says. He confesses that, "luck is the operative word," as to why he did not take a beating with the rest of the market on the name. White says Fort Washington worked out the value of Charter's assets and decided that the bonds were a bargain at last week's levels. "They've got the size. They're the most built out, and have the most updated technology [in the cable sector]," he says. Charter's 10.75% notes of '09 were bid at 69 last Thursday.
Mark Pauly, a buy-side trader at Houston-based AIG Global Investment Corp., is not so sure that Charter has hit bottom. "Charter is such a big, liquid issuer--I think it somewhat reflects the total high-yield market. It's hard to say this is the bottom for the entire market," he says. Pauly declined to comment about AIG's positioning in Charter, other than to say that the firm owns the bonds.