Charter’s Ambitions Leave It on Razor’s Edge of Junk Market

Charter Communications Inc.’s takeover of Time Warner Cable Inc. will make it one of the biggest borrowers in both the investment-grade and junk-bond markets, a status that’s giving some pause to investors.

Bonds sold by Charter this month, which will partially finance its ambition of becoming the second-largest cable operator in the U.S., are trading at levels that show investors aren’t entirely convinced the company deserves to be treated like its peers. The same goes for Time Warner Cable debt, whose investment-grade ratings Charter has pledged to protect. Those securities have lost 16 times more than the broader market this year.