Published on 7/21/2020 in the Prospect News High Yield Daily.
New Issue: Charter prices upsized $1.5 billion tap of 4¼% notes due 2031 at 102 to yield 4.015%
By Paul A. Harris
Portland, Ore., July 21 – Charter Communications Inc. priced a massively upsized $1.5 billion add-on to the CCO Holdings LLC/CCO Holdings Capital Corp. 4¼% senior notes due Feb. 1, 2031 (B1/BB) at 102, resulting in a 4.015% yield to maturity in a Tuesday drive-by, according to an informed source.
The issue size increased from $500 million.
The issue price came on top of price talk.
Lead left bookrunner Morgan Stanley & Co. LLC will bill and deliver. Joint bookrunners were Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Mizuho Securities USA Inc., BofA Securities Inc., Goldman Sachs & Co. LLC, MUFG, RBC Capital Markets Corp., TD Securities (USA) LLC and Wells Fargo Securities LLC.
The Stamford, Conn.-based broadband and cable operator plans to use the proceeds, including the additional proceeds resulting from the $1 billion upsizing of the deal, for general corporate purposes, including repayment of the existing senior notes (including the potential redemption of all the 5 7/8% senior notes due 2024), and to fund potential buybacks of Charter class A common stock or Charter Holdings common units.
| Issuer: | CCO Holdings LLC and CC Holdings Capital Corp.
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| Amount: | $1.5 billion, increased from $500 million
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| Maturity: | Feb. 1, 2031
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| Security description: | Add-on to 4¼% senior notes due Feb. 1, 2031
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| Left lead bookrunner: | Morgan Stanley & Co. LLC (bill and deliver)
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| Joint bookrunners: | Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Mizuho Securities USA Inc., BofA Securities Inc., Goldman Sachs & Co. LLC, MUFG, RBC Capital Markets Corp., TD Securities (USA) LLC and Wells Fargo Securities LLC
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| Co-managers: | Barclays, BNP Paribas Securities Corp., Scotia Capital (USA) Inc., SMBC Nikko Securities America Inc., SunTrust Robinson Humphrey Inc., Credit Agricole CIB, U.S. Bancorp Investments Inc., LionTree Advisors LLC, Blaylock Van LLC, CastleOak Securities LP, Loop Capital Markets LLC and Siebert Williams Shank & Co. LLC
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| Coupon: | 4¼%
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| Price: | 102
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| Yield to maturity: | 4.015%
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| Spread: | 341 bps
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| First call: | July 1, 2025 at 102.125
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| Trade date: | July 21
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| Settlement date: | July 24
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| Ratings: | Moody's: B1
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| S&P: BB
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| Distribution: | Rule 144A and Regulation S with registration rights
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| Price talk: | 102
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| Marketing: | Drive-by
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| Original issue: | $1.5 billion priced July 6, 2020
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| Total issue size: | $3 billion
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