8-KMaterial AgreementsExhibits & Filings

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Agreement Terminated (Mar 15, 2005)

Filed March 15, 2005For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) filed an 8-K on March 15, 2005, reporting the termination of a material definitive agreement. Specifically, CC V Holdings, LLC, a subsidiary, completed the redemption of its $113 million in 11.875% Senior Discount Notes due 2008. This action was taken to satisfy covenants under the Amended and Restated Credit Agreement of Charter Communications Operating, LLC, another subsidiary. The redemption cost approximately $122 million, which was financed through borrowings under Charter Operating's credit facilities. This event is significant for investors as it indicates a restructuring or compliance action related to the company's debt obligations and credit agreements, potentially impacting its leverage and financial flexibility.

Key Highlights

  • 1CC V Holdings, LLC redeemed $113 million of 11.875% Senior Discount Notes due 2008.
  • 2The redemption was completed on March 14, 2005.
  • 3This redemption was necessary to comply with the Amended and Restated Credit Agreement of Charter Communications Operating, LLC.
  • 4The total cost of the redemption was approximately $122 million.
  • 5The redemption was funded by borrowings under Charter Operating's credit facilities.
  • 6A press release detailing this event is attached as an exhibit.

Frequently Asked Questions

Charter Communications, through its subsidiary CC V Holdings, LLC, redeemed the notes to comply with the terms of its Amended and Restated Credit Agreement with Charter Communications Operating, LLC. This suggests the outstanding notes were in violation of, or not permitted under, the terms of their primary credit facility.

The approximately $122 million cost for the redemption was financed through new borrowings drawn from Charter Communications Operating, LLC's existing credit facilities.

The notes were redeemed at 103.958% of their principal amount, plus accrued interest. This means the company paid more than the face value of the debt. Companies often do this to satisfy covenants in other agreements, to eliminate restrictive terms associated with the redeemed debt, or to restructure their balance sheet, even if it incurs a short-term premium cost.

This filing indicates the company is actively managing its debt obligations to maintain compliance with its credit agreements. While incurring a premium and increasing debt under its credit facilities, it demonstrates an effort to avoid potential breaches of contract and maintain access to its primary lending sources. Investors should monitor the company's overall debt levels and its ability to service its debt.