(Bloomberg) -- JPMorgan Chase & Co. is lending Altice USA an additional roughly $1.1 billion to refinance debt before an early repayment penalty kicks in, a move that may sooth creditors still reeling from a bombshell antitrust lawsuit and controversial debt maneuver.
JPMorgan is providing the funds so that Altice can refinance the loan — a $1 billion asset-backed facility it got from Goldman Sachs Group Inc. and TPG Angelo Gordon in July — at par value, according to people familiar with the matter. The debt’s call protection period starts in the coming days, meaning Altice would have to pay a premium above par to refinance.
Representatives for JPMorgan, TPG and Goldman Sachs declined to comment. A representative for Altice didn’t immediately respond to a request for comment.
Any efforts to preserve Altice’s cash are likely to appease creditors to the embattled telecommunications firm, which has struggled under a heavy debt load and has brought on advisers to evaluate its options.
Its lenders have also been rocked by some of its recent moves. In November, the US unit of billionaire Patrick Drahi’s telecom empire sued creditors including Apollo Capital Management LP, Ares Management LLC and BlackRock Financial Management Inc., alleging they had formed an “illegal cartel” when they struck a so-called cooperation agreement.
That same month, Altice — which recently rebranded as Optimum Communications Inc. — raised $2 billion from JPMorgan for the early refinancing of a loan due in 2028. While that loan carried some of the strictest investor safeguards in the company’s capital structure, the borrowing was raised with collateral that had been removed from existing creditors, effectively making JPMorgan more senior in the debt repayment line, Moody’s Ratings said in a report.
The refinancing comes before a premium kicks in that could allow the lenders to capture as much as 116 cents on the dollar. The asset-backed facility due 2031 is secured by receivables generated by the company’s Bronx and Brooklyn service area and network assets, primarily the Hybrid-Fiber Coaxial network.
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