Charter Communications Inc. is selling $350 million in bonds, the proceeds of which will fund the cash portion of a cable systems swap with AT&T Broadband, with the remaining portions used for working capital. Charter is the third company recently to complete such a swap with AT&T.
The sale, by Charter subsidiaries Charter Communications Holdings LLC and Charter Communications Holdings Capital Corp., will close on May 15, Charter reports.
Under the deal, Charter will pick up 574,000 customers in St. Louis, and parts of Alabama, California and Nevada. AT&T will get $1.04 billion in cash, Charter stock worth $500 million and two Florida cable systems of 62,000 subscribers, Reuters reports.
Charter says the $350 million will consist of 9.625 percent senior notes due 2009; $575 million of 10 percent senior notes due 2011; and $575.2 million of 11.75 percent senior discount notes due 2011, with a principal at maturity of $1.02 billion. The sale should reap about $1.5 billion, Charter says.