Charter to close on its financing deals
Update: Charter Communications Inc. said Thursday that it closed on the sale of $546 million in bonds, $26 million more than it previously announced. The Town and Country cable provider also completed its $500 million loan deal.
The company’s new debt totals nearly $1.05 billion.
Wednesday’s post:
Charter Communications Inc. is expected to close a deal today on sales of $520 million worth of bonds and said it plans to complete a $500 million loan deal Thursday.
The $1.02 billion in new debt, first announced last week, will help fund the Town and Country cable provider through 2009. Charter will receive net proceeds of $971 million.
The company said March 11 that it would raise $775 million through bonds and loans, but that amount later increased because lenders were willing to offer more financing than originally anticipated, spokeswoman Anita Lamont said today.
The money is crucial to Charter. In a conference call last month, executives said Charter had enough cash to operate only until mid-2009. Funds raised through the bonds and loans will be used to pay off debt and for “general corporate purposes,” keeping the company solvent through the end of next year.
Sounds like paying off one credit card with another.
Paying down existing debt that has fast approaching maturity dates by obtaining loans carrying less interest and extended maturity dates is not necessarily a bad thing. If you do not have the cash on hand, it would make sense in the case of credit card debt as well.
Improving customer service and continuing to refinance long term debt while growing their business is critical to their success. As long as those things occur, I don’t think they’ll have a problem securing financing.
-Civic
$300 M in stock equity and shrinking - probably headed for a reverse split to save face
$200 B in long term debt and growing - interest burden will sap all earnings soon
Bad financials, and don’t even get me started on personal experience with their cust. service
short version: i’m switching to AT&T DSL
Come on now, it’s not “$200B in long term debt,” only $20B. That’s not bad on $250M in market cap, is it?
Oh. Right. Well, at least the stock is holding up.
What I can’t understand is who’s buying these bonds, even at junk rates. Even at liquidation, they couldn’t raise $20B, no matter how many ways they find to euphemize subscriber losses. Did Mr. Allen give a personal guarantee?