Time Warner Bonds Lose $782 Million as Comcast Said to Drop Deal

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Time Warner Cable Inc. bondholders were handed about $782 million in losses Thursday as Comcast Corp. was said to plan to walk away from its offer to acquire the media provider.

That’s the decline in market value for Time Warner’s dollar-denominated bonds, according to data from Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Among those bonds, Time Warner Cable’s $1.25 billion of 4.5 percent notes due in July 2042 tumbled 5.6 cents to 90.6 cents on the dollar at 4:25 p.m. in New York to yield 5.14 percent.

Comcast may formally announce the cancellation of the $45.2 billion deal this week following opposition from regulators, according to people with knowledge of the matter, who asked not to be named discussing private information. Comcast’s exit may open the door for Charter Communications Inc. to revive its bid for Time Warner, according to Chris Ucko, a New York-based analyst at CreditSights Inc.

“This deal falling apart has the market assuming that Charter will likely come back in,” Ucko said by telephone. “The risk is that Time Warner Cable bondholders end up in a position where they are below investment grade, and that would be a lot of pain for bondholders.”

Ucko said that Charter is a junk-rated company and any deal could “put Time Warner Cable bondholders in a significantly weaker credit than they are on their own.”

The U.S. Federal Communications Commission staff joined lawyers at the Justice Department in opposing the planned combination of Time Warner and Comcast, the two largest U.S. cable companies.