8-KMaterial AgreementsExhibits & Filings

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Material Agreement (Nov 23, 2004)

Filed November 23, 2004For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) announced on November 16, 2004, a significant financing event involving the issuance and sale of $750 million in aggregate principal amount of 5.875% Convertible Notes due 2009. These notes are convertible into Charter's Class A common stock at a conversion price of approximately $2.42 per share. This transaction aimed to raise capital, with a portion of the proceeds designated to redeem existing 5.75% convertible senior notes due 2005. The company also granted an over-allotment option to the purchasers, which was exercised, increasing the total principal amount of notes sold. The agreement includes provisions for the registration of the notes and the underlying common stock for resale, with penalties for non-compliance. The initial interest payments on the new notes are secured by U.S. government securities purchased with the proceeds, providing a layer of security for early noteholders.

Key Highlights

  • 1Issuance of $750 million in 5.875% Convertible Notes due 2009.
  • 2Notes are convertible into Class A common stock at an approximate price of $2.42 per share.
  • 3Over-allotment option for an additional $112.5 million in notes was exercised.
  • 4Proceeds to be used, in part, to redeem outstanding 5.75% convertible senior notes due 2005.
  • 5First six interest payments are secured by U.S. government securities.
  • 6Agreement includes registration rights for the notes and underlying common stock.
  • 7Potential for Charter to pay cash or a combination of cash and stock upon conversion.

Frequently Asked Questions

The primary purpose of the new convertible notes is to raise capital for Charter Communications. A significant portion of the proceeds is earmarked for the redemption of its existing 5.75% convertible senior notes due 2005. The offering also provides Charter with flexibility in managing its debt structure and capital resources.

The notes carry a coupon of 5.875% and are due in 2009. They are convertible into Charter's Class A common stock at a rate of approximately 413.2231 shares per $1,000 principal amount, implying a conversion price of about $2.42 per share. Charter has the option to pay cash or a mix of cash and stock upon conversion.

The first six semi-annual interest payments on the new convertible notes are secured by a portfolio of U.S. government securities. These securities were purchased using proceeds from the note sale, offering a degree of protection to noteholders during the initial period.

Charter has agreed to file a shelf registration statement covering the resale of the notes and the Class A common stock issuable upon conversion. Additionally, Charter will file a registration statement to facilitate the sale of shares loaned to an affiliate of Citigroup Global. Failure to meet these filing deadlines may result in increased interest payments on the notes.