Liberty Interactive/Charter’s $500 million exchangeable talked at 1.75%-2.25%, up 27.5%-32.5%

By Rebecca Melvin

New York, Aug. 17 – Details emerged on Liberty Interactive LLC’s plan to sell $500 million of senior debentures exchangeable for Charter Communications Inc. The paper was talked to price with a coupon of 1.75% to 2.25% and an initial exchange premium of 27.5% to 32.5%, according to market sources.

The Rule 144A deal has a $75 million greenshoe and was being sold via active bookrunners BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc.

Pricing was slated to occur after the market close on Wednesday.

The exchangeable is non-callable until Oct. 5, 2023 and freely callable thereafter. There is a put on Oct. 5, 2023.

Dividend protection is in the form of a pass through, and upon an exchange of debentures, the company may deliver Charter Communications stock, cash or a combination of stock and cash.

Proceeds will be used to repay up to $450 million outstanding under a margin loan facility recently entered into by its wholly owned special purpose subsidiary LV Bridge, LLC; to repurchase its outstanding 0.75% exchangeable senior debentures due 2043 and to satisfy its exchange obligation in cash for holders that tender the 2043 debentures. Any remaining net proceeds will be used for general corporate purposes, including to pay interest on the debentures.

The debentures, as well as the associated cash proceeds, will be attributed to the Liberty Ventures Group.

Liberty Interactive LLC is a subsidiary of Liberty Interactive Corp., a media and communications company based in Englewood, Colo.

On Friday, Liberty Media Corp. priced $444.6 million of senior debentures exchangeable for common shares of Time Warner Inc. to yield 2.25% with an initial exchange premium of 30%.

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