Charter Communications Inc. NASDAQ:CHTR, a cable and internet provider, has announced a large debt-restructuring plan covering nearly $20 billion of outstanding bonds. The company identified about $10 billion of existing debt issued by Charter-affiliated subsidiaries and Time Warner Cable that it may repurchase through a combination of cash and newly issued bonds, with acceptance determined by different priority levels. Charter also offered to buy up to $9.7 billion of additional bonds issued by its subsidiaries, with purchases subject to varying priority levels and an overall cap.
To support the transaction, Charter plans to issue as much as $3.5 billion of new bonds scheduled to mature in 2038 and 2041. The final size of the new offering is expected to depend on the outcome of the exchange process, suggesting the company is seeking flexibility as it adjusts its debt structure. Investors may view the transaction as a significant financing move given the scale of the bonds involved and the company's approaching second-quarter earnings report.
Barclays Plc, a banking and financial services company, Citigroup Inc. NYSE:C, a global financial services group, and Morgan Stanley NYSE:MS, an investment banking and wealth management firm, are managing the transaction. Charter is aiming to complete settlement of the debt exchange on Aug. 24. The transaction could draw investor attention to Charter's borrowing profile and refinancing strategy, although its full effect may depend on participation levels and the final terms of the new debt.