Charter Communications Boosts Junk Bond Deal to $1.7 Billion

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Charter Communications Inc. sold $1.7 billion of bonds, raising $200 million more than what the cable operator originally planned.

The company’s CCO Holdings unit issued debt maturing in eight years at a yield of 5.875 percent, according to data compiled by Bloomberg. Proceeds will be used to refinance debt and partially pay for its takeover of Time Warner Cable Inc., according to a release Thursday.

“The yields are attractive and the combination of the companies in the merger makes for a high quality company that should generate a ton of cash,” Spencer Godfrey, an analyst at high-yield research firm KDP Investment Advisors Inc. in Montpelier, Vermont, said in a telephone interview. “The management team has expressed a desire to have less leverage and they should be able to find synergies, which is comforting.”

Regulators are weighing whether to approve Charter’s $55.1 billion bid to buy Time Warner Cable, which, along with Charter’s pending purchase of Bright House Networks LLC, would create the country’s second-largest cable and broadband provider with 23.9 million customers. In April, Comcast Corp. dropped its $45.2 billion takeover bid for Time Warner Cable in the face of regulatory opposition.

Charter was the second largest non-bank issuer of corporate debt last year, tapping the bond market for $20.7 billion, with the last sale a $2.5 billion offering in November, according to Bloomberg data.

The company reported earnings today, with fourth quarter revenue rising 6.4 percent to $2.51 billion. Net losses widened to $122 million, compared with $48 million a year earlier because of expenses related to the takeovers.

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