Nashville, Nov. 17 - Charter Communications Inc. sold $750 million of five-year convertible notes at par to yield 5.875% with a 12% initial conversion premium via bookrunner Citigroup Global Markets Inc.
The Rule 144A deal priced at the cheap end of yield talk for a 5.5% to 6.0% coupon and in the midrange area of premium guidance for 10% to 15%.
Coupon payments will be collateralized with Treasuries for three years. If converted within three years, holders will get shares plus a portion of the coupon escrow.
The St. Louis-based cable company said it plans to call its 5.75% convertibles promptly following the closing of the new notes. Also, Charter is entering a stock loan transaction for up to 150 million shares with Citigroup after the new convertible offering in order to facilitate arbitrage trading in the convertibles.
Terms of the deal are:
| Issuer: | Charter Communications Inc.
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| Issue: | Convertible senior notes
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| Bookrunner: | Citigroup Global Markets Inc.
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| Amount: | $750 million
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| Greenshoe: | $112.5 million
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| Maturity: | Nov. 15, 2009
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| Coupon: | 5.875%
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| Price: | Par
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| Yield: | 5.875%
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| Conversion premium: | 12%
|
| Conversion price: | $2.42
|
| Conversion ratio: | 413.2231
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| Contingent conversion: | No
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| Contingent payment: | No
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| Dividend protection: | Yes
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| Takeover protection: | Yes, with additional shares if at a minimum of 10% cash
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| Call: | Non-callable for 3 years with a 180% hurdle, then with 150% hurdle
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| Price talk: | 5.5-6.0%, up 10-15%
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| Pricing date: | Nov. 16, after market close
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| Settlement date: | Nov. 22
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| Distribution: | Rule 144A
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