Published on 4/14/2016 in the Prospect News High Yield Daily.
New Issue: Charter sells $300 million tap of 5½% notes due 2026 at 100.375
By Paul A. Harris
Portland, Ore., April 14 – Charter Communications, Inc. priced a $300 million add-on to its 5½% senior notes due May 1, 2026 at 100.375 on Thursday, according to a market source.
The quick-to-market execution rendered a 5.441% yield to worst and a 5.451% yield to maturity.
The reoffer price came 12.5 basis points rich to the rich end of the 100 to 100.25 price talk.
BofA Merrill Lynch was the left bookrunner.
Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., UBS Investment Bank and Wells Fargo Securities LLC were the joint bookrunners.
The Stamford, Conn.-based cable operator and broadband communications services provider plans to use the proceeds to refinance debt.
Two sets of credit ratings bear upon the issue. Moody's Investors Service has an existing rating of B1. The existing ratings from both Standard & Poor's and Fitch Ratings are BB-. However pro forma ratings, pending the close of the acquisition of Time Warner Cable, are Ba3 from Moody's and BB+ from both S&P and Fitch.
| Issuers: | CCO Holdings, LLC and CCO Holdings Capital Corp., subsidiaries of Charter Communications, Inc.
|
| Face amount: | $300 million
|
| Proceeds: | $301,125,000
|
| Maturity: | May 1, 2026
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| Security description: | Add-on to 5½% senior notes due May 1, 2026
|
| Left bookrunner: | BofA Merrill Lynch
|
| Joint bookrunners: | Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., UBS Investment Bank, Wells Fargo Securities LLC
|
| Co-managers: | RBC Capital Markets, Mizuho Securities, MUFG, Scotia Capital, SunTrust Robinson Humphrey Inc., US Bank, Credit Agricole CIB, SMBC Nikko, TD Securities, J.P. Morgan Securities LLC, LionTree, Morgan Stanley & Co. LLC, Lebenthal, Mischler, Ramirez, Williams
|
| Coupon: | 5½%
|
| Price: | 100.375
|
| Yield to worst: | 5.441%
|
| Yield to maturity: | 5.451%
|
| Spread: | 367 bps
|
| Call: | Make-whole call at Treasuries plus 50 bps until May 1, 2021, then callable at 102.75
|
| Trade date: | April 14
|
| Settlement date: | April 21 with accrued interest
|
| Existing ratings: | Moody's: B1
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| Standard & Poor's: BB-
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| Fitch: BB-
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| Pro forma ratings for acquisition: | Moody's: Ba3
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| Standard & Poor's: BB+
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| Fitch: BB+
|
| Distribution: | Rule 144A and Regulation S with registration rights
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| Price talk: | 100 to 100.25
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| Marketing: | Quick to market
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| Original issue: | $1.2 billion priced at par on April 7
|
| Fungibility: | Add-on notes will become fungible with the original notes
|
| Total issue size: | $1.5 billion
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