8-KMaterial AgreementsFinancial EventsExhibits & Filings

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Material Agreement (Oct 19, 2005)

Filed October 19, 2005For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) announced on October 19, 2005, via an 8-K filing, the entry into a new senior bridge loan agreement for $600 million by its indirect subsidiaries, CCO Holdings, LLC (Borrower) and CCO Holdings Capital Corp. (Guarantor). This facility is set to be drawn upon between January 2, 2006, and September 29, 2006, and will eventually convert to "Exchange Notes" with a maturity of six years from the first borrowing date. The agreement includes specific conditions for borrowing, such as the absence of default and the satisfaction of conditions under Charter's existing credit agreement. The terms also mandate prepayments from proceeds of asset sales exceeding certain thresholds and from the issuance of equity or incurrence of debt. This financing move is significant as it provides substantial liquidity and signals potential strategic activities or refinancing efforts by Charter's subsidiaries.

Key Highlights

  • 1Charter Communications' indirect subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp., have secured a $600 million senior bridge loan facility.
  • 2The loan facility is available for drawing between January 2, 2006, and September 29, 2006.
  • 3The bridge loans are expected to be converted into "Exchange Notes" maturing six years after the first borrowing date.
  • 4Interest on the bridge loans will be based on an adjusted LIBOR rate plus a spread that increases over time.
  • 5The agreement includes provisions for mandatory prepayments funded by net proceeds from asset sales exceeding $75 million (or $200 million for certain other dispositions) and from equity or debt issuances.
  • 6Borrowing is contingent upon no default existing and the satisfaction of certain conditions under Charter's existing credit agreement.
  • 7The covenants and events of default are similar to those in the senior secured notes indenture for CCH I, LLC.

Frequently Asked Questions

The filing does not explicitly state the primary purpose, but bridge loans are typically used to cover short-term funding needs or to bridge financing gaps until longer-term funding is secured. For Charter's subsidiaries, it could be for operational needs, acquisitions, or refinancing existing debt.

The period during which the Borrower may draw upon the facility will begin on January 2, 2006, and will end on September 29, 2006.

After a certain period, the loans will be exchanged for "Exchange Notes." This exchange is mandatory under specific conditions, either when a majority of loans have been exchanged or 18 months after the first borrowing date, whichever comes first. The Exchange Notes will mature six years from the first borrowing date.

Yes, the loan agreement mandates that proceeds from certain asset sales (above $75 million or $200 million, depending on the nature of the disposition) and net proceeds from the issuance of equity or incurrence of debt by Charter and its subsidiaries must be used to prepay the loans or the subsequent Exchange Notes.