Charter Communications' debt traded into the 99 range from 98 last week on news that the company would issue bonds to pay down its bank debt. An estimated $15 million changed hands. The company has raised $900 million from the sale of junk bonds which it says it will use to increase its business and pay down the debt. Market players report the company's revolver will be paid off. Charter is a cable company based in Scottsdale, Ariz. Calls to Kent Kalkwarf, cfo, were referred to spokeswoman Colleen Haggerty, who declined to comment.
In early January, the debt was trading in the 98 5/8 range as market watchers reported continued appetite for stable industries like cable. But one hesitant dealer added a cautionary note. "The market's having a run right now because there's not enough new issue. With the possibility of new issue to come, I'm wondering if it's going to give weakness to some of these [staple names]," he said. "There's got to be a break sooner or later, and prices will kick back." Charter has a $540 million deal that breaks down into three tranches and expires in 2007. Pricing is LIBOR plus 21/ 2%. TD Securities is the lead arranger.