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Charter launches US$15.5bn M&A bond for Time Warner
(UPDATES with launch)
By Davide Scigliuzzo
NEW YORK, July 9 (IFR) - US cable giant Charter
Communications finally made its way to the high-grade bond
market on Thursday, launching a US$15.5bn bond to help fund its
US$56bn takeover of Time Warner Cable (Xetra: T3W1.DE - news) .
The split-rated trade had amassed more than US$40bn of
orders at the time it was launched, allowing Charter to tighten
pricing on all six tranches.
Goldman Sachs (NYSE: GS-PB - news) was global coordinator on the deal - rated
Ba1/BBB-/BBB- by Moody's, S&P and Fitch - with Bank of America
Merrill Lynch and Credit Suisse (NYSE: CS - news) as active books, and Deutsche
Bank and UBS (NYSEArca: FBGX - news) as passives.
Charter was expected to pay about 8bp-15bp in new issue
concessions compared with Time Warner (Xetra: AOL1.DE - news) outstandings - an
impressive result given the recent volatility in the market.
The bonds were quoting about 5bp tighter than their launch
levels in the gray market.
The senior secured notes are part of what is expected to be
a US$31bn M&A funding package that will also include high-yield
bonds and bank debt.
Size Maturity IPTs Guidance Launch
US$2bn 5-yr T+215bp area T+200bp T+200bp
US$3bn 7-yr T+255bp area T+245bp T+245bp
US$4.5bn 10-yr T+275bp area T+260bp T+260bp
US$2bn 20-yr T+330bp area T+325bp T+325bp
US$3.5bn 30-yr T+340bp area T+335bp T+335bp
US$500m 40-yr T+375bp area T+370bp T+370bp
(Reporting by the IFR team, Davide Scigliuzzo; Editing by
Shankar Ramakrishnan)
