Charter close to pulling trigger on M&A bond: sources

By Davide Scigliuzzo and Joy Wiltermuth

NEW YORK, July 8 (IFR) - Charter Communications (NasdaqGS: CHTR - news) could hit the high-grade market Thursday with a much-anticipated multi-billion dollar M&A bond for Time Warner Cable (Xetra: T3W1.DE - news) if conditions are stable, two buyside sources said.

Worries about China and Greece have kept issuance down in recent days, but signs of some stability tomorrow morning could get Charter off the sideline, they said.

The high-grade bond is part of an expected US$31bn funding plan that also includes issuance of high-yield bonds and bank debt to help fund the US$56bn acquisition.

"The investment-grade (portion) is expected tomorrow, the high-yield maybe next week," said one of the sources, each of whom took part in investors calls with Charter this week.

"But (the high-yield bond) does not have to come (yet). So that can be tabled until the market is stronger."

The go/no-go decision tomorrow morning would depend on the tone in the broader markets, with buyside and sellside alike watching the Greek debt standoff and China's stock market rout.

Syndicate bankers say that, despite those woes, investor appetite for quality paper remains strong.

Charter's merger with TWC will combine the fourth and second-largest cable players in the US.

The cable M&A deal would be the largest of its kind since records began in 1980, and the sixth-largest US M&A deal on record, according to Thomson Reuters data, valuing TWC at US$78.7bn including debt and US$56bn without.

Charter initially said it had lined up commitments from Bank of America Merrill Lynch, Credit Suisse (NYSE: CS - news) , Goldman Sachs (NYSE: GS-PB - news) and UBS when it announced details of the planned acquisition in May.

IFR later reported that Deutsche Bank (Xetra: 514000 - news) had also joined the line up of banks arranging the financing. (Reporting by Davide Scigliuzzo and Joy Wiltermuth; Editing by Shankar Ramakrishnan and Marc Carnegie)