8-KRegulation FD

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Regulation FD Disclosure (Mar 24, 2005)

Filed March 24, 2005For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) filed an 8-K on March 24, 2005, reporting on a debt exchange transaction undertaken by its subsidiary, Charter Communications Operating, LLC. The subsidiary entered into agreements with a select group of institutional holders of its 8.25% Senior Notes due 2007 to exchange these notes for new 8.375% Senior Second Lien Notes due 2014. This transaction involves approximately $269.8 million in principal amount of new notes being issued in exchange for approximately $282.8 million of the existing 2007 notes. The exchange is expected to close around March 28, 2005. This move suggests Charter Operating is actively managing its debt maturity profile, potentially looking to extend its debt obligations and alter its interest rate structure.

Key Highlights

  • 1Charter Communications Operating, LLC is undertaking a debt exchange transaction.
  • 2The exchange involves 8.25% Senior Notes due 2007 for new 8.375% Senior Second Lien Notes due 2014.
  • 3Approximately $269.8 million in principal of new notes will be issued.
  • 4Approximately $282.8 million of existing 2007 notes will be acquired.
  • 5The transaction is structured as a private placement with a small number of institutional holders.
  • 6The expected closing date for the exchange is on or about March 28, 2005.

Frequently Asked Questions

The primary purpose appears to be refinancing existing debt. Charter Communications Operating, LLC is exchanging its 8.25% Senior Notes due 2007 for new 8.375% Senior Second Lien Notes due 2014, effectively extending the maturity of a portion of its debt and altering its interest rate.

In this specific transaction, Charter Operating is issuing approximately $269.8 million of new notes in exchange for approximately $282.8 million of existing notes. This indicates that the company is buying back its 2007 notes at a premium, reducing the principal amount of debt maturing in 2007 and issuing new debt with a later maturity date (2014) at a slightly higher interest rate (8.375% vs 8.25%).

Charter Communications Operating, LLC is the issuer of the new notes and the entity acquiring the existing notes. The counterparties are a small number of institutional holders of Charter Communications Holdings, LLC's 8.25% Senior Notes due 2007.

The exchange is expected to close on or about March 28, 2005.