Charter Communications' bank debt traded up this week to 97 3/8 from a previous level of 95 3/4. Dealers reported about $10 million changed hands. Buyers and sellers could not be determined. The credit recently notched down on Adelphia Communications' new deal flooding the market with more cable paper. Dealers remain optimistic on cable names, but say where anything lands remains a mystery in current market conditions. "Just because $2.5 million of Charter traded at 96 doesn't mean the market was down; it just means one person wanted to sell," a dealer said, explaining why market fluctuations occur. "If I were to buy $10 million of Charter, it would push [levels] back up." Charter is a cable company based in St. Louis, Mo.
Charter may seem like a good deal for anyone eyeing the credit for its return, but a market player put in a cautionary note. "There's three points upside, and 97 points downside," he said. "There's not a lot of yield in the bank debt world, and people are full right now." Charter has a $540 million deal that breaks down into three tranches and expires in 2007. Pricing is LIBOR plus 2 3/4%. TD Securities is the lead arranger.