Charter active after Comcast deal announced; Qwest floating-rate tranche still soaring

By Carlise Newman

Chicago, June 6 - Charter Communications Inc. was stronger Friday after Comcast Corp. announced it completed the sale of its interest in a cable joint venture to Charter's chairman, Paul Allen.

The twice-delayed sale is part of an agreement between Charter and AT&T Broadband, which was purchased by Comcast last year.

Charter's term loan B was quoted at 93 bid, 93 5/8 offered, up one point from levels early in the week.

Under the terms of the agreement, Comcast had the right to force Microsoft co-founder Allen to purchase its stake in debt-strapped Charter.

Comcast said the sale netted it about $728 million in cash, about $3 million more than the original agreement. Comcast said it plans to use the proceeds from the sale to pay down its debt.

In recent months, executives from both companies have publicly and privately said they have tried to explore other options. In one scenario, Allen would transfer some of Charter's cable systems to Comcast, in place of ponying up the cash, said a source familiar with the discussion.

The deal announced Friday adheres to the previously reported terms of the original agreement.

"Charter went crazy after the Comcast deal was announced, even though it had been somewhat expected this week," a trader said.

Qwest Corp. "probably passed everyone's desks today," a trader said. The company's $1.75 billion credit facility broke for trading Thursday after launching at the beginning of the week.

The $1.25 billion four-year unsecured, non-amortizing senior term loan (Ba3/B-/B) was quoted at 101½ bid, 102 offered by the end of the day, compared to levels of 101 bid, 101½ offered by the close Thursday.

The tranche was priced at Libor plus 475 basis points, was offered at 99 and has a Libor floor of 175 basis points.

The Denver telecommunications company's $500 million fixed-rate incremental term loan due 2010 was quoted at 99¾ bid, par offered by the end of the day, unchanged from Thursday.

Originally, the new facility was expected to only consist of a $1 billion floating-rate tranche, but since more than $3 billion in commitments was received at the start of the week, the company opted to add the $500 million fixed-rate loan and increase the floating-rate loan by $250 million.

Merrill Lynch & Co., Credit Suisse First Boston and Deutsche Bank are leading the deal, which will be used to refinance debt due in 2003 and fund business needs.

"Qwest was way up there," a trader said. "We were lucky to have that because there wasn't a lot going on today. The sun is out in New York for the first time in 12 days. Everyone planned to leave early before they even got in."

WestPoint Stevens Inc.'s bank debt was still moving higher, a distressed debt trader said, to 97¾ bid from levels Wednesday around 95.

"They've been really active, really up there, and a lot has traded," the trader said. "They're not a big mover usually but there was all the news this week."

WestPoint Stevens released details of its restructuring Thursday and said noteholders will receive new notes and 30% of its common stock plus rights to subscribe to further notes and the remaining stock under its proposed restructuring agreement.

Under the terms of the restructuring, holders of $525 million 7 7/8% senior notes due 2005 will receive $175 million in 8% unsecured subordinated pay-in-kind notes due 2009. Holders of $475 million 7 7/8% senior notes due 2008 will receive $175 million in 8% unsecured pay-in-kind notes due 2012.

Both are contractually subordinated to the new senior credit facility and new senior secured notes.

Noteholders will also receive 30% of the new common stock of the reorganized company.

Noteholders also have a right to subscribe in cash for $166.7 million of 8% senior secured notes due 2009 secured by a second priority lien on all of the company's assets, redeemable at par by WestPoint at any time; and 70% of the new common stock of the company.

Holders who exercise their rights will be entitled to receive a payment from WestPoint equal to 1% of the amount of senior secured notes for which they subscribe.

The WestPoint, Ga.-based home fashions manufacturer's senior credit facility will be replaced by an exit facility.

Terms for unsecured creditors has not been determined yet, according to a document filed with the Securities and Exchange Commission.

Holders of old common stock will receive nothing.

In follow-up news, Williams Cos., Inc. said it closed on its new $800 million cash-collateralized credit facility.

The new facility, primarily for issuing letters of credit, replaced a $1.1 billion credit line entered into last summer that was comprised of a $700 million secured revolving facility and a $400 million secured letter of credit facility.

The Tulsa, Okla. company said the new facility releases the majority of its midstream gas and liquids assets which were security for the previous agreement.

Citigroup Global Markets Inc. and Banc of America Securities LLC were joint lead arrangers and joint bookrunners for the two-year revolver.

Also Friday, Regal Entertainment Group said its Regal Cinemas Corp. and Regal Cinemas, Inc. subsidiaries completed the amendment and restatement of their existing credit facility including an additional $315 million term loan.

The new loan will be used to partially fund the Centennial, Colo. movie theater operator's previously announced extraordinary dividend to the stockholders.

The term loan D (Ba2/BB-) was priced at Libor plus 250 basis points. Credit Suisse First Boston was the lead bank.

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