8-KOther Events

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report (Jul 1, 2003)

Filed July 1, 2003For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) announced modifications to a loan agreement with Vulcan Inc. through its subsidiary, Charter Communications VII, LLC (CC VII). Originally, Vulcan committed up to $300 million in loans to help Charter's operating subsidiaries comply with financial covenants. However, Charter has determined it will not need to draw on this facility for the quarter ending June 30, 2003. The key changes involve the removal of the June 30, 2003 deadline for definitive documentation. Vulcan's commitment is now extended to March 31, 2004, contingent on the execution of definitive documents before that date. A previously agreed-upon $3 million facility fee will be earned as of June 30, 2003, and paid in quarterly installments over three years. Additionally, an extension fee of 0.50% per annum on the commitment amount will be payable from June 30, 2003, until the agreement terminates or definitive documents are executed.

Key Highlights

  • 1Charter Communications will not draw on the $300 million loan facility from Vulcan Inc. for the quarter ending June 30, 2003.
  • 2The deadline for definitive documentation for the Vulcan loan facility has been removed.
  • 3Vulcan's commitment to provide up to $300 million in loans is extended to March 31, 2004.
  • 4The $3 million facility fee is now earned as of June 30, 2003, and will be paid over three years in quarterly installments.
  • 5An extension fee of 0.50% per annum on the commitment amount will be paid from June 30, 2003, until definitive documentation is executed or the commitment expires.
  • 6These changes provide Charter with more flexibility regarding its financial covenant compliance for the near term.

Frequently Asked Questions

This filing announces modifications to a loan agreement between Charter Communications' subsidiary, CC VII, and Vulcan Inc. The main point is that Charter will not draw on the $300 million facility for the current quarter, and the terms of the commitment have been extended and adjusted.

Charter has determined that it does not require the $300 million loan facility from Vulcan to meet its financial covenant obligations for the quarter ending June 30, 2003. This suggests they have sufficient liquidity or have found alternative means to manage their financial obligations.

The deadline to finalize documentation has been removed, and Vulcan's commitment is extended to March 31, 2004. A $3 million facility fee is now recognized and will be paid over three years, and an annual extension fee of 0.50% on the commitment amount applies until the agreement is finalized or expires.

The extension to March 31, 2004, provides Charter with continued access to this potential funding source. It indicates that while not needed immediately, Charter may still consider utilizing these funds in the future, or it provides a financial backstop as they work towards finalizing documentation.