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Charter Communications Scraps Plans for $1.5B High Yield Bond Offering

Charter Communications has withdrawn a proposed offering for $1.5 billion of senior notes due to market conditions, the would-be borrower said in a statement.

The cable operator pitched the Credit Suisse–led transaction at the start of Wednesday’s session. Structured as 10.5-year (non-call five) bonds, guidance for the deal was set at the 4.75% area. Proceeds were earmarked to back general corporate purposes, including a potential buyback of stock.

“Today’s debt capital market conditions did not allow this segment of investor expectations and those of Charter to align,” said Christopher Winfrey, CFO of Charter Communications, in a June 21 statement. “We will continue to be highly disciplined in our approach to financings, and will return to the broader credit markets when market conditions meet our expectations.”

On Wednesday, crude oil prices touched lows not seen since August 2016, causing volatility to spill over into broader markets. The iShares fund HYG ended the session at $87.60 versus $88.11 at Tuesday’s close. Similarly, the SPDR fund JNK also dipped, to close yesterday at $36.87, from $37.10 one day prior.

Both funds were working to retrace losses early on in Thursday’s session, with the HYG up 0.08% at $87.67, and the JNK up 0.09% at $36.90. Also, West Texas Intermediate Crude was trading at $42.84 this morning, for a 0.73% gain.

Charter’s last unsecured print had been in March, when it completed a $1.25 billion add-on to existing 5.125% notes due 2027, priced at 100.5, for a 5.057% yield. Concurrently, the company placed $1.25 billion of crossover 5.375% secured notes due 2047, priced at 99.968 for a 5.377% yield. — Jakema Lewis

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This story is taken from analysis which first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

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