Charter Prices $3.0 Billion Senior Secured Notes

Rhea-AI Summary

On February 18, 2021, Charter Communications (NASDAQ: CHTR) announced the pricing of $3.0 billion in Senior Secured Notes. This includes $1.5 billion in 2041 Notes with an interest rate of 3.500%, $1.0 billion in 2052 Notes at 3.900%, and $500 million in 2061 Notes at 3.850%. Proceeds will be used for general corporate purposes, including potential stock buybacks and debt repayment. The offering is expected to close on March 4, 2021, and was conducted under an effective automatic shelf registration statement with the SEC.

Positive

• Successful pricing of $3.0 billion in Senior Secured Notes enhances liquidity.
• Interest rates of 3.500%, 3.900%, and 3.850% are relatively low, suggesting favorable borrowing conditions.

Negative

• Issuing substantial debt may increase financial leverage risk.
• Usage of proceeds for stock buybacks may not directly enhance long-term shareholder value.

STAMFORD, Conn., Feb. 18, 2021 /PRNewswire/ -- Charter Communications, Inc. (NASDAQ: CHTR) (along with its subsidiaries, "Charter") today announced that its subsidiaries, Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. (collectively, the "Issuers"), have priced $3.0 billion in aggregate principal amount of notes consisting of the following securities:

• $1.5 billion in aggregate principal amount of Senior Secured Notes due 2041 (the "2041 Notes"). The 2041 Notes will bear interest at a rate of 3.500% per annum and will be issued at a price of 99.544% of the aggregate principal amount.
• $1.0 billion in aggregate principal amount of Senior Secured Notes due 2052 (the "2052 Notes"). The 2052 Notes will bear interest at a rate of 3.900% per annum and will be issued at a price of 99.951% of the aggregate principal amount.
• $500 million in aggregate principal amount of Senior Secured Notes due 2061 (the "2061 Notes," and together with the 2041 Notes and the 2052 Notes, the "Notes"). The 2061 Notes will form a part of the same series as the Issuers' Senior Secured Notes due 2061 issued on December 4, 2020, which bear interest at a rate of 3.850% per annum. The 2061 Notes will be issued at a price of 94.668% of the aggregate principal amount.

Charter intends to use the net proceeds from the sale of the Notes for general corporate purposes, including to fund potential buybacks of Class A common stock of Charter or common units of Charter Communications Holdings, LLC, to repay certain indebtedness and to pay related fees and expenses. Charter expects to close the offering of the Notes on March 4, 2021, subject to customary closing conditions.

The offering and sale of the Notes were made pursuant to an effective automatic shelf registration statement on Form S-3 filed with the Securities and Exchange Commission (the "SEC").

Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co LLC were Joint Book-Running Managers for the Notes offering. The offering was made only by means of a prospectus supplement dated February 18, 2021 and the accompanying base prospectus, copies of which, when available, may be obtained on the SEC's website at www.sec.gov or by contacting Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, 6933 Louis Stephens Drive, Morrisville, North Carolina 27560, United States; Telephone: (800) 221-1037; E-mail: usa.prospectus@credit-suisse.com, or by contacting J.P. Morgan Securities LLC, Attention: Investment Grade Syndicate Desk, 383 Madison Avenue, New York, New York, 10179; Telephone: (212) 834-4533, or by contacting Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014; E-mail: prospectus@morganstanley.com.

This news release is neither an offer to sell nor a solicitation of an offer to buy the Notes and shall not constitute an offer, solicitation or sale, nor is it an offer to purchase, or the solicitation of an offer to sell the Notes in any jurisdiction in which such offer, solicitation, or sale is unlawful.

About Charter 
Charter Communications, Inc. (NASDAQ:CHTR) is a leading broadband connectivity company and cable operator serving more than 31 million customers in 41 states through its Spectrum brand. Over an advanced communications network, the company offers a full range of state-of-the-art residential and business services including Spectrum Internet^®, TV, Mobile and Voice.

For small and medium-sized companies, Spectrum Business^® delivers the same suite of broadband products and services coupled with special features and applications to enhance productivity, while for larger businesses and government entities, Spectrum Enterprise provides highly customized, fiber-based solutions. Spectrum Reach^® delivers tailored advertising and production for the modern media landscape. The company also distributes award-winning news coverage, sports and high-quality original programming to its customers through Spectrum Networks and Spectrum Originals. More information about Charter can be found at corporate.charter.com.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This communication includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies and prospects, both business and financial.  Although we believe that our plans, intentions and expectations as reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations.  Forward-looking statements are inherently subject to risks, uncertainties and assumptions including, without limitation, the factors described under "Risk Factors" from time to time in our filings with the SEC.  Many of the forward-looking statements contained in this communication may be identified by the use of forward-looking words such as "believe," "expect," "anticipate," "should," "planned," "will," "may," "intend," "estimated," "aim," "on track," "target," "opportunity," "tentative," "positioning," "designed," "create," "predict," "project," "initiatives," "seek," "would," "could," "continue," "ongoing," "upside," "increases," "focused on" and "potential," among others. 

All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement.  We are under no duty or obligation to update any of the forward-looking statements after the date of this communication.

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SOURCE Charter Communications, Inc.

FAQ

What is the amount of the Senior Secured Notes offered by Charter Communications?

Charter Communications offered a total of $3.0 billion in Senior Secured Notes.

What are the interest rates for the Senior Secured Notes issued by CHTR?

The 2041 Notes have a 3.500% interest rate, the 2052 Notes have a 3.900% interest rate, and the 2061 Notes have a 3.850% interest rate.

When is the expected closing date for Charter's Senior Secured Notes offering?

The expected closing date for the offering is March 4, 2021.

What does Charter intend to use the proceeds from the notes for?

Charter intends to use the net proceeds for general corporate purposes, including potential stock buybacks and debt repayment.

Who managed the offering of the Senior Secured Notes for CHTR?

Credit Suisse Securities, J.P. Morgan Securities, and Morgan Stanley were the Joint Book-Running Managers for the Notes offering.