Charter Replenishes Its Cash Reserve


May. 28 2019, Published 1:38 p.m. ET

Charter sells bonds maturing in 2029

Charter Communications (CHTR) recently sold its ten-year bonds and raised $750 million in additional cash, adding to its $1.5 billion cash reserve at the end of the first quarter. The company has outlined several potential uses for its new bond cash. One of its goals is to use the bond money to repay some of its existing debt.

Charter finished the first quarter with $73.4 billion in debt. Dish Network (DISH) and AT&T (T) closed the first quarter with $13.8 billion and $163.9 billion worth of debt, respectively.

The other use Charter is targeting for its new bond cash is the financing of its share repurchase program. The company repurchased $963 million of its shares in the first quarter.

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On its part, Comcast (CMCSA) decided to pause its share repurchase program this year to allow it to reduce its debt, which soared following its acquisition of European broadcaster Sky. Comcast agreed to pay $40 billion for the asset to outbid Fox Corporation (FOXA), which was also pursuing it and had recently joined forces with the Walt Disney Company (DIS). Comcast used borrowed money to pay for the Sky transaction.

Charter is keen to diversify its business

Charter’s move to expand its war chest through bond sales comes as the company is working to counter the cord-cutting wave and diversify its business. The company has ventured into the business of selling mobile phone services, diversifying outside its cable roots.

Charter made a profit of $253 million in the first quarter compared to $168 million a year ago.


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