Charter seeks minimum $3.5 billion term loan G at Libor plus 350 bps

By Sara Rosenberg

New York, Aug. 11 – Charter Communications Operating LLC is now looking to get a minimum $3.5 billion seven-year first-lien term loan G, as opposed to a $3.2 billion six-year term loan G and $4.2 billion seven-year term loan H, according to a market source.

Pricing on the term loan G is talked at Libor plus 350 basis points with a 0.75% Libor floor and an original issue discount of 99, the source said.

By comparison, the original term loan G price talk was Libor plus 275 bps to 300 bps with a 0.75% Libor floor and a discount of 99½, and term loan H price talk was Libor plus 275 bps to 300 bps with a 0.75% Libor floor and a discount of 99.

In addition, the term loan G has 101 soft call protection for one year, extended from six months, the source continued.

Furthermore, under the revised terms, the term loan G will fund immediately into escrow, has a ticking fee of the full spread and Libor floor upon funding, and has 0 bps MFN, triggered only by the balance of acquisition proceeds and applies to secured loans and secured bonds.

Recommitments were due at 5 p.m. ET on Monday, the source added.

Closing is expected in early to mid-September.

Goldman Sachs Bank USA, Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the lead banks on the senior secured deal.

Proceeds will be used to fund the acquisitions of customers and systems from Comcast Corp.

The acquisitions are conditioned on the completion of the merger of Comcast and Time Warner Cable, as well as the receipt of Hart-Scott-Rodino, FCC and other required regulatory approvals, Charter shareholder approval and various other matters.

Under the agreement, following the close of the Comcast-Time Warner Cable merger, Charter will buy systems serving about 1.4 million of the prior Time Warner Cable video customers for an estimated value of $7.4 billion based on projected 2014 EBITDA.

In addition, Charter will own about 33% of the new publicly traded cable provider (SpinCo) to be spun off by Comcast serving about 2.5 million customers, and Comcast shareholders, including the former Time Warner Cable shareholders, will own about 67% of SpinCo.

Charter will acquire its interest in SpinCo by issuing stock to Comcast shareholders.

Charter is a Stamford, Conn.-based broadband communications company and cable operator.

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