Executive Summary

• TLB-6 domino falls, with more to come on likely aggressive LME. Optimum Communications (f/k/a Altice USA) disclosed via an 8-K filing that it plans to repay the $1.95 billion TLB-6 (boxed in the capital structure table below) issued at CSC Holdings, LLC, with proceeds from a new $2 billion Unsub Term Loan B due November 2028. On top of that, the company also disclosed that it filed an antitrust lawsuit against financial institutions in the cooperation agreement (which we understand comprises 90%+ of lender/bondholders) for “conspiring to obstruct our efforts to manage our debt.”
• CreditSights Reaction. We believe this move was widely anticipated by the market since the company raised new money from a so-called ABS in July. We believe levels reflect the distressed scenario in the capital structure but may not fully reflect just how aggressive the company is willing to get to further impair debt and capture discount.
• Covenant Review Reaction. With the B-6 out of the picture, the company regains flexibility as it relates to transfer material IP to an Unsub, asset sale capacity and uptiering transactions, among other things. The “drop-down” type of transactions are part of Patrick Drahi & Co.’s playbook and creditors should be wary of his next move.