Time Warner prices $2 billion debt offering

AP News
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Posted: Dec 08, 2009 7:49 PM

Time Warner Cable Inc. on Tuesday priced a $2 billion public offering of debt securities, selling $500 million worth of 3.5 percent notes due 2015 and $1.5 billion of 5 percent notes due 2020.

The nation's second biggest cable TV operator expects to use the proceeds to repay debt under its five-year term loan and part of what it owes under its commercial paper program. The proceeds may also be used for general expenses.

Time Warner Cable has faced heftier interest expenses after piling on debt to separate from its parent, Time Warner Inc. The company is trying to pay back its net debt, which totaled $22 billion at the end of the third quarter, as quickly as possible. The debt load is affecting free cash flow, a critical measure of liquidity for typically debt-laden cable companies.

The latest debt sale is expected to close Dec. 11. The debt is guaranteed by Time Warner subsidiaries TW NY Cable Holding Inc. and Time Warner Entertainment Co.

Barclays Capital Inc., Deutsche Bank Securities Inc. and Goldman Sachs are book-running managers.

Shares of New York-based Time Warner fell 36 cents to $42.85 in after-hours trading Tuesday after closing at $43.21, up 16 cents on the day.