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Charter sets pricing in exchange for 5.875% convertibles
New York, Sept. 25 - Charter Communications, Inc. set pricing in its exchange offer for Charter Communications Holding Co., LLC's $413 million 5.875% convertible senior notes due 2009.
For each $1,000 principal amount of the existing convertibles, investors will receive $1,317.01 principal amount of new 6.5% convertible senior notes due 2027 and $22.19 in cash for accrued interest from May 16.
The new convertibles will have an initial conversion price of $3.41 and an initial conversion ratio of 293.3868. They will mature on Oct. 1, 2027. They will be putable on Oct. 1, 2012, 2017 and 2022 at par.
There is change of control protection.
The exchange is expected to settle on Oct. 2.
Pricing was based on the average of the daily volume-weighted average price of Charter's class A common stock for the 10 consecutive trading days ending on Sept. 25, which was determined to be $2.6219.
The exchange ends at 11:59 p.m. ET on Sept. 27.
The offer was amended on Sept. 14, increasing the amount covered to all the convertibles from $309 million.
Charter also amended the terms of the new notes it is offering. The company will now issue up to $793 million of new 6.5% convertible senior notes due 2027. The coupon was lowered from 7%.
Other amendments include a change to the initial conversion premium for the new notes, which is now 30% instead of 40%.
As already reported, the purpose of the exchange offer is to extend Charter's debt maturities.
As of 5 p.m. ET on Sept. 13, before the modifications, no convertibles had been tendered in the exchange.
The offer began on Aug. 29.
Global Bondholder Services Corp. (866 470-3700 or 212 430-3774) is information agent. Citigroup Global Markets Inc. (877 531-8365 or 212 723-7406) and Morgan Stanley (800 624-1808 or 212 761-5384) are dealer managers.
Charter is a St. Louis-based broadband communications company
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