Charter Communications Selling $1.5 Billion In New Debt To Pay Down Old & Buy Back Stock

Charter Communications

The nation’s second largest cable operator Charter Communications said Monday it’s selling $1.5 billion in debt and could use the fresh cash to repay existing debt and fund share buybacks.

It expects to close the offering of senior unsecured notes due in 2031 on July 9.

The company sold $3 billion in senior notes in April as media companes sought a cash cushion in the midst of the fast-spreading, economy-devastating coronavirus pandemic.

Charter had approximately $79 billion of debt outstanding as of March 31, including $54.6 billion of senior secured debt, according to ratings agency Fitch, which in a note Monday praised the company’s “market share-driven strategy focusing on enhancing the overall competitiveness of its video service and leveraging its expanding all-digital infrastructure.” Charter is improving subscriber metrics, growing revenue and ARPU, and stabilizing operating margins,” Fitch said.

Charter is also the third-largest multichannel video programming distributor after Comcast and AT&T’s DirecTV with nearly 30 million customers. Despite pressure on the legacy cable bundle, its growth in Internet, mobile, commercial and video revenues has helped drive the stock higher. It gained 42% from a low in April, the height of a Wall Street panic over the impact of the virus.

Charter also ranked 18th among the 30 most popular stocks held by hedge funds at the end of the first quarter, according to finance website Insider Monkey.

Shares closed Monday up 1.6%, or $8.60, at $526.29.


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