Charter shops $1.5 billion 10.5-year notes; new First Quality paper active; energy issues gyrate at lower levels

By Paul Deckelman

New York, June 21 – Charter Communications Inc. was marketing a $1.5 billion issue of 10.5-year notes to potential investors on Wednesday, high-yield syndicate sources said.

However, while the cable and broadband provider’s quickly shopped megadeal had been expected to price via a pair of funding subsidiaries during the afternoon hours, no word on whether that had in fact happened as scheduled.

The primary arena was otherwise fairly quiet. British insurer Phoenix Group Holdings said in a regulatory filing that it would look to issue an as yet undetermined amount of dollar-denominated 10-year securities in a Tier II funding transaction.

Elsewhere, prospective issuers such as j2 Cloud Services LLC, Werner Co., CSVC Acquisition Co. and Exela Technologies continued to market their respective deals via ongoing investor roadshows.

Among recently priced issues, traders saw respectably brisk volume in First Quality Finance Co., Inc.’s new eight-year notes, which had priced on Tuesday.

Energy credits such as California Resources Corp., Halcon Resources Corp., Whiting Petroleum Corp. and Chesapeake Energy Corp. continued to lose ground on lower energy prices.

Statistical market performance measures remained lower across the board on Wednesday, their second straight session on the downside. They had turned southward on Tuesday after having been mostly better on Monday.

Charter markets megadeal

The Junkbondland primary market saw no actual pricings take place during the session, syndicate sources said, versus the $475 million of new U.S. dollar-denominated and fully junk rated paper which priced during Tuesday’s session, or the even more impressive $1.87 billion that had gotten done on Monday.

But the day was not without its activity.

Charter Communications, Inc. was heard by the syndicate sources to be shopping $1.5 billion of new senior notes due in February of 2028.

The issue had been expected to price during Wednesday’s session following a 3 p.m. ET closing of the order books, but as of press time on Wednesday evening, there had been no definitive word on whether the pricing had in fact occurred as scheduled, with terms to be released later.

The Rule 144A/Regulation S offering, which is being sold with registration rights, would be done through the Stamford, Conn.-based cable and broadband operator’s wholly owned CCO Holdings, LLC and CCO Holdings Capital Corp. financing subsidiaries.

The deal would be brought to market via bookrunners Credit Suisse Securities (USA) LLC, which will be the left lead manager, along with Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Citigroup Global Markets Inc., Wells Fargo Securities LLC, UBS Securities LLC and Goldman Sachs & Co., plus a large roster of co-managers.

Charter plans to use the new-deal proceeds for general corporate purposes, including funding potential buybacks of Class A common stock of Charter Communications, Inc. or common units of Charter Communications Holdings, LLC.

Phoenix Group plans dollar notes

Out of Europe came word that British insurance giant Phoenix Group Holdings plans to issue 10-year U.S. dollar-denominated securities in a Tier 2 financing transaction.

The company said in a Wednesday regulatory filing that the transaction would follow a series of investor meetings in Asia and in Europe, slated to begin on Friday, with the holders of its existing £428,113,000 of 6 5/8% subordinated notes due 2025 and £450 million of 4 1/8% Tier 3 notes due 2022.

Phoenix Group mandated Citigroup Global Markets Ltd, HSBC Bank plc, J.P. Morgan Securities plc and Merrill Lynch International to run the roadshow.

There was no immediate word on how Phoenix Group planned to use the proceeds of the expected dollar-denominated transaction.

First Quality notes trade actively

In the secondary market, the new First Quality Finance Co., Inc. 5% notes due 2025 were among the most actively traded credits, a trader said, seeing more than $46 million of that paper having changed hands.

He pegged the bonds at 100¾ bid, up from the par level at which First Quality Finance – the funding subsidiary of Great Neck, N.Y.-based personal care products producer and bottled water provider First Quality Enterprises , Inc. – had priced its $400 million issue, downsized from an originally announced $500 million, on Tuesday afternoon.

A second trader located the notes at 100½ bid.

Among other recently priced issues, a trader said that Intelsat Jackson Holdings SA’s 9¾% notes due 2025 were “pretty much unchanged” around 99½ bid, the same level at which the Luxembourg-based communications satellite company’s $1.5 billion quick-to-market issue had finished on Tuesday, after retreating slightly from initial gains.

The trader noted that while there was some volume in the new deal, it was nowhere near the more than $200 million that had traded on Tuesday

Those bonds had priced at par on Monday.

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