Charter Nearing Debt Deal? - Multichannel

Charter Nearing Debt Deal?

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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
dollar.

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
later."

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
deals.

"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.

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