Charter sells giant split-rated deal; natural resources names rebound; funds gain $45 million

By Paul Deckelman

New York, July 9 – Charter Communications Inc. came to market on Thursday with one of the biggest-ever bond deals – an upsized six-part $15.5 billion behemoth, part of a $31 billion bond-and-loan financing package backing its acquisition of bigger rival Time Warner Cable Inc. and smaller sector peer Bright House Networks LLC.

But while Charter has been a familiar and prolific issuer of junk bonds, Thursday’s split-rated offering of senior secured notes – signaling the start of its planned transition to an investment-grade credit – actually priced off the high-grade desks and was quoted and traded on a spread-versus-comparable Treasuries basis.

There was no other news heard emanating from the primary market during the session.

In the secondary arena, natural-resources credits, such as the bond of iron-ore miner Fortescue Metals Group Ltd. and oil and gas exploration and production operator California Resources Corp. were firmer on the day, following the overall trajectory of the junk market as a whole, but finished off from higher levels hit earlier on.

Another numerical gauge – flows of investor cash into or out of high-yield mutual funds and exchange-traded funds, considered a reliable barometer of overall market liquidity trends – were modestly higher during the trading week ended Wednesday, its $45 million cash gain contrasted with the nearly $3 billion outflow posted last week – the biggest downturn of the year.

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