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How Altice Is Managing Its $22 Billion Debt

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Altice raises $1.5 billion to refinance outstanding debt

Altice USA (ATUS) carried $21.6 billion in debt at the end of the third quarter, its most recent reported period. On January 25, Altice announced that it had raised $1.5 billion through bond sales to qualified institutional investors. The notes that Altice sold will mature in ten years and have an interest rate of 6.5%.

Altice said it would use the proceeds from the sale of the notes to redeem certain old notes with higher interest rates. Specifically, the company said it would retire $526 million in old notes that bear interest at the rate of more than 8.6% and were due this month. Additionally, the company said it would redeem $905.3 million of outstanding notes that are due in 2023 and bear interest at the rate of more than 10%.

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Controlling interest expenses

This transaction is indicative of a company moving to replace high-yield notes with lower-yield ones, perhaps as a way to control its interest expenses. The company incurred $388.2 million in interest expenses in the third quarter, up from $378.1 million a year ago.

Free cash flow

Altice generated $276 million in free cash flow in the third quarter, which helped it to lower its debt load a bit and repurchase some of its shares. The company generated revenue of $2.4 billion in the third quarter, an increase of 4.1% YoY. Comcast (CMCSA) and Charter Communications (CHTR) grew their revenues by 5.0% and 4.2% YoY, respectively, in the third quarter. Revenue rose 5.0% YoY at Viacom (VIAB) but sank 5.2% YoY at Dish Network (DISH) in the third quarter.

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