Bloomberg News

Charter Communications Cuts Loan Rate; BOJ Easing Favors CLOs

April 08, 2013

Charter Communications Inc. (CHTR:US) cut the rate it will pay on its term loan, while Crown Castle International Corp. (CCI:US) is seeking to refinance borrowings. Bank of Japan’s easing measures will be supportive of collateralized loan obligation issuance, Morgan Stanley (MS:US) said.

Charter, the fourth-largest U.S. cable operator, will pay interest at 2.25 percentage points more than the London interbank offered rate, down from the 2.5 percentage points initially proposed, according to a person who asked not to be identified because the information is private. Crown Castle is planning to raise a $1.58 billion term loan to refinance borrowing under a 2012 credit pact. The debt that comes due in January 2019 may pay interest at 2.5 percentage points more than Libor.

The market for CLOs will benefit from the quantitative easing measures announced by the Bank of Japan (8301), according to Morgan Stanley. Japanese banks, which have long been investors in CLOs, will probably boost their purchases of senior notes backed by speculative-grade loans in their search for yield, according to a report today from the bank. The CLO-issuance pace of $26.6 billion this year, has been ahead of the $60 billion Morgan Stanley forecast for 2013.

Alcentra Ltd., the money manager owned by the Bank of New York Mellon Corp., hired JPMorgan Chase & Co. for its first European CLO since 2008, according to three people with knowledge of the matter.

First Data

Credit card processor First Data Corp. is seeking to lower the rate on a $1.01 billion term loan that comes due in September 2018, according to a person with knowledge of the matter. The company may pay interest at 4 percentage points more than Libor, compared with the margin of 5 percentage points it currently pays.

The SPDR Blackstone/GSO Senior Loan ETF, the first actively managed bank loan exchange-traded fund that began trading last week, added 100 million shares to its total outstanding share size, according to data compiled by Bloomberg. The fund is managed by GSO Capital Partners, the credit investing arm of Blackstone, and State Street Global Advisors, a unit of State Street.

Dollar General Corp. (DG:US), the discount retailer acquired by KKR & Co. in 2007, is planning to raise $3.15 billion in bonds and loans to help refinance senior secured borrowings.

The price of loans fell 0.01 cent to 98.31 cents on the dollar last week, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 Index.

To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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Companies Mentioned

  • CHTR
    (Charter Communications Inc)
    • $168.05 USD
    • 0.05
    • 0.03%
  • CCI
    (Crown Castle International Corp)
    • $82.51 USD
    • 0.13
    • 0.16%
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