Charter bank debt softens as COO goes on paid leave

By Sara Rosenberg

New York, Oct. 22 - Charter Communications Inc.'s bank debt experienced some turmoil in an otherwise quiet market on Tuesday with levels softening after news of a management change was released, strengthening during the day and then finally closing softer.

The company announced that executive vice president and chief operating officer, David G. Barford, is on paid leave status. Carl Vogel, president and chief executive officer, has assumed Barford's responsibilities on an interim basis. The company gave no further explanation.

The bank debt ended the day with quotes around 82½ on the bid side and 84 on the offer side, according to a trader.

Earlier this month, Charter traded down by a point during morning activity on Oct. 4 as rumors that the company's chief financial officer was going to resign and liquidity was limited circulated around the marketplace, a trader previously told Prospect News. Interestingly, the bank debt bounced back up, regaining its losses by late afternoon as market participants were told that the rumors were false.

On Oct. 4, The St. Louis, Mo. cable operator's term loan B bank paper was quoted in the high 85 to 86 region following its recovery from those rumors.

Also affecting the company's bank debt earlier this month was news that the company anticipates falling below previously projected third-quarter operating cash-flow guidance, primarily due to basic analog customer losses. Based on the current forecast, Charter expects revenue growth to be approximately 13% for the quarter. Following the company's negative forecast for the third quarter at Goldman Sachs' Communacopia XI Conference, the bank debt dropped down to a bid in the 85 range and an offer in the 86 range from around 87/88. More specifically, one trader had the loan quoted at 85/86, while a second trader had the loan quoted at 851/2/86½ on Oct. 2.

Overall, it was a quiet day in the bank loan market as many people were attending the Loan Syndications and Trading Association's 7th annual conference on Tuesday, according to market sources.

The conference addressed key industry issues including portfolio valuation, corporate governance, distressed trade settlement, FASB consolidation issues affecting the CLO/CDO marketplace, analysis of loans and adoption of Cusips for syndicated loans.

Meanwhile, Ball Corp.'s loan, which is still listed as October business but has not officially picked a launch date, is going to be aimed mainly at European investors, according to a syndicate source. The $1.4 billion credit facility consists of a $500 million multi-currency revolver, a $250 million euro/sterling term loan A, a €300 million term loan B and a $350 million term loan B. Pricing on the various tranches has not been disclosed yet, the syndicate source said.

"This should do a nice job expanding their investor base overseas," the syndicate source said.

Deutsche Bank and Bank of America are the lead banks on the Broomfield, Colo. supplier of metal and plastic packaging company's deal.

Proceeds will be used to help fund the acquisition of Schmalbach-Lubeca AG.

In other news, Georgia Pacific Corp./Unisource launched a $600 million revolver last week to help fund the leveraged buyout of Unisource by Bain Capital. CIT, Congress Financial and Foothill Capital are the lead banks on the deal, according to market sources.

The revolver was priced with an interest rate of Libor plus 325 basis points, sources said.

Unisource is Georgia Pacific's paper distribution subsidiary.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.