Charter Nearing Debt Deal?


Charter Communications Inc. stock surged late Wednesday, finishing at $4.21
per share (up 55 cents, or 15%) in 4 p.m. trading, as rumors swirled through the
market that the St. Louis-based MSO was nearing a deal to refinance its
convertible debt.

About 16.5 million shares of Charter stock traded Wednesday -- more than four
times the 3.9 million shares traded the day before.

Charter bonds, under pressure as the company struggles to pare down its debt
load, also traded higher -- they were up nearly 4 points to 75 cents on the

According to sources in the financial community, rumors swirled Wednesday
that Charter was nearing a deal to refinance its convertible debt -- a move that
would demonstrate a greater access to capital.

"The converts have the first two maturities -- in 2005 and 2006," one source
in the financial community said. "Getting rid of them, in a normal financing
environment, Charter can last for a while and deleverage through asset sales

The MSO has almost $1.4 billion in convertible debt -- a $750 million, 5.75%
convertible senior note that matures Oct. 15, 2005, and a $632.5 million, 4.75%
convertible senior note that matures June 1, 2006.

Charter -- which has a $19 billion debt load -- has said in the past that it
would sell nonstrategic cable assets to help pay down those obligations.

"The company has recently shifted from being viewed as a bankruptcy candidate
to a more normalized cable model," UBS Warburg LLC cable debt and equity analyst
Aryeh Bourkoff said, adding that he had no knowledge of any pending Charter

"While the company still has a lot of debt, it’s increasingly afforded more
options in dealing with liquidity," he added.

Charter spokesman Dave Andersen declined to comment.