Executive Summary

• • • IG Cable/Telecom outperforms on Charter/Cox merger. IG Communications outperformed the market year-to-date with an excess return of 0.5% versus 0.1% for the IG Index, driven by cable (1.4%) as towers (0.1%) and wireless (0.0%) performed more in-line. Charter secured (+3.8%) was the top performer by a large margin on the news it would acquire peer Cox (-0.7%) in a deleveraging transaction. However, outside the merger, IG Communications performed generally in-line with the IG index, with performance ranging from American Tower (0.3%) to Crown Castle (-0.2%).

    • IG Media weighed down by WBD disaster. IG Media (excluding Cable) significantly underperformed the market year-to-date with an excess return of -2.2% versus +0.1% for the IG Index. The poor performance was entirely attributable to Warner Bros. Discovery (-8.2%), which was downgraded to junk (exiting the IG index on June 30th), following the announcement of a plan to spin-off its streaming/studios operations and related tenders/coercive exchanges. Outside WBD, IG Media posted an excess return of 0.1%, in line with the IG Index, led by strong-balance-sheet names (News Corp, Netflix and Omnicom) as well as a surprising performance by Paramount (0.4%).

    • HY Telecom has been a top performer. Our HY Communications index is up 5% in total return to date, outperforming the HY index, which is up 4% over the same time period. Telecom is up 5%, with M&A supporting FTTH valuations (e.g., VZ/Frontier, AT&T/Lumen) and ABS offering capital raising alternatives.

Telecom/Cable/Sat Equity Performance