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Charter Communications (NSDQ: CHTR), which has been on the brink of bankruptcy since the summer, now appears closer than ever to a Chapter 11 restructuring. Moody’s Investors Service believes that step is now unavoidable and as a result, lowered Charter’s corporate family rating down two steps to “Caa3” — nine levels below investment grade, Reuters reported. Charter, which is controlled by *Microsoft* co-founder Paul Allen, has a $74 million debt payment due on several of its divisions’ credit. The maturities on the debt expire on February 15, 2009.
Despite the downgrade, Moody’s outlook on Charter remains stable. The ratings agency estimates that bondholders may recover about 65 percent of the debt’s value, on average, in a Chapter 11 reorg. At mid-day, Charter shares slid 2.37 percent to $0.0742.