Charter Communications' bank debt bounced around last week, dropping to 95 3/4 and then traded back up to 961/ 2 in a series of $5 million trades. The credit, which had been one of the strongest and most liquid names, has started to soften as the recently syndicated $2 billion deal for Adelphia Communications pumped more cable paper into the market.
Even without the recent wave of Adelphia paper, however, dealers describe the par market as very skittish. That skittishness as much as anything has pushed down even the safer bets, like Charter. "If Charter were to trade down three points after you bought it, you'd have to do 12 trades to make up for that," explained a dealer, noting his market relies on 1/4 of a point profits and can't afford to take risks. "The market feels very busy, but there's little going on a lot of sniffing around and no action. People are not positioning themselves." Charter Communications is a cable company based in St. Louis, Mo. Calls to Kent Kalwarf, cfo, were referred to spokeswoman Mary Jo Moehle, who declined to comment.
Charter's debt softened two weeks ago to the 96 1/2 range on news that the company's ceo resigned. Dealers said any management shuffle sparks anxiety in an already nervous market. Charter has a $540 million deal that breaks down into three tranches and expires in 2007. Pricing is LIBOR plus 23/ 4%. TD Securities is the lead arranger.