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Charter Communications Jumps on Debt Buyback

Shares add 8% after the company repurchases close to $2 billion in bonds.
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Charter Communications

(CHTR) - Get Charter Communications, Inc. Class A Report

arranged a big bond buyback that will free up about $300 million of cash for debt reduction.

The news sent the shares up 38 cents, or 8%, to $5.09 in Instinet premarket trading.

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The Paul Allen-controlled cable operator will buy back from private investors $609 million of convertible senior notes and $1.3 billion of mostly convertible bonds sold by a holding company subsidiary, using proceeds from a new $1.6 billion 7-year note to finance the purchase.

The company said the transaction significantly reduces the amount of debt maturing in 2005 and 2006 and allows it to capture $294 million in debt discount. That money will be added to $1.1 billion received in previously announced asset sales and be put toward debt reduction.

The company said the transactions were an important part of its ongoing debt restructuring. Some of the details were announced in July.