Charter Communications is launching $7.4 billion of incremental institutional term loans via a lender meeting tomorrow at 2:00 pm EDT, sources said. The funding will come as new tranche G and H loans, which are expected to have different maturities, the sources added.
Goldman Sachs, Bank of America Merrill Lynch, Credit Suisse, and Deutsche Bank have underwritten term debt totaling up to $8.4 billion and a $500 million revolver in connection with Charter’s purchase of certain assets of Comcast Corp. The remaining $1 billion of that commitment will be a $1 billion revolver that’s not on offer to the market, sources noted.
The cable operator has in place a $1.5 billion TLE due 2020 and a $1.2 billion TLF due 2021, both of which are priced at L+225, with a 0.75% LIBOR floor.
In April, Charter and Comcast announced a three-part plan that would grow Charter’s subscriber base and help with regulatory hurdles for Comcast’s $45 billion acquisition of Time Warner Cable.
According to regulatory filings, following the completion of Comcast’s merger with Time Warner Cable, Charter will acquire roughly 1.4 million existing Time Warner Cable subscribers, increasing its video customer base from 4.4 million to roughly 5.7 million and making Charter the second largest cable operator in the U.S.
Charter and Comcast also agreed to transfer assets involving roughly 1.6 million former Time Warner customers and 1.6 million Charter customers in a tax-efficient exchange, improving the geographic presence of both companies. Additionally, Comcast will spin off a new entity composed of cable systems serving roughly 2.5 million Comcast customers to its shareholders, with Charter acquiring approximately 33% of the equity of the spin-off in exchange for 13% of the equity of a new holding company of Charter.
The three-part plan is contingent upon completion of the Comcast and Time Warner merger. – Staff reports