Charter Lines Up Loans to Buy Comcast Subs

Receives Commitments For $8.9 Billion
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Charter Communications is putting together the funds to go ahead with its planned purchase of about 1.4 million customers from Comcast, after Comcast closes its pending $69 billion merger with Time Warner Cable.

Charter recently received commitments from four separate banks for up to $8.9 billion, most of which will be used to buy former Time Warner Cable systems located in Ohio, Kentucky, Wisconsin, Indiana and Alabama.

Charter is looking to augment existing operations in those areas: it already has a strong presence in Wisconsin, with about 578,000 customer relationships, and would add another 372,000 subscribers in Milwaukee if the transactions go through, according to SNL Kagan estimates. Charter also will gain about 616,000 customers in Cleveland, according to Kagan.

“All of these assets are physically contiguous and put Charter in an operationally better footprint,” Charter CEO Tom Rutledge said shortly after the deal was first announced.

Announced in April, Charter’s transactions with Comcast would occur only after Comcast’s pending merger with Time Warner Cable is completed and after sales, swaps and a spinoff of assets to a separate company — tentatively called SpinCo — occur. Charter will own onethird of SpinCo.

About 1.6 million customers are to be swapped between Charter and Comcast-TWC, and Comcast is going to move about 2.5 million customers into publicly traded SpinCo. The three transactions were valued at a collective $20 billion when first announced.

It was unclear whether loan proceeds would also be used in part for the swapped systems, but according to a Charter spokesman, the bulk of the money would be used for the purchased properties.

Charter said it received commitments from Goldman Sachs, Bank of America, Credit Suisse and Deutsche Bank for senior secured term loan facilities totaling up to $8.4 billion and a senior secured incremental revolving facility equal to $500 million.

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