8-KMaterial AgreementsFinancial EventsExhibits & Filings

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Material Agreement (Sep 30, 2010)

Filed September 30, 2010For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) announced on September 27, 2010, the completion of a significant debt financing transaction through its indirect subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp. These entities successfully issued $1 billion in aggregate principal amount of 7.25% Senior Notes due 2017. The net proceeds from this issuance were contributed to Charter Communications Operating, LLC, a key operating subsidiary, to repay existing indebtedness under its credit agreement. This move is aimed at restructuring and potentially deleveraging the company's balance sheet by replacing older or more expensive debt with this new issuance. The issuance is governed by an Indenture, which details the terms of the Notes. These are senior unsecured obligations of the Issuers, fully and unconditionally guaranteed by Charter Communications, Inc. The Indenture includes covenants that restrict the Issuers' ability to incur additional debt, pay dividends, make investments, and engage in certain other corporate actions. Importantly, it also includes provisions for redemption by the Company and a requirement for a change of control offer to purchase the Notes under specific circumstances. Furthermore, an Exchange and Registration Rights Agreement mandates that Charter file for registration of these notes within 365 days, or face penalties in the form of additional interest.

Key Highlights

  • 1Charter Communications completed the issuance of $1 billion in 7.25% Senior Notes due 2017 through its subsidiaries.
  • 2The proceeds from the note issuance will be used to repay existing indebtedness under Charter's credit agreement.
  • 3The Notes are guaranteed on a senior unsecured basis by Charter Communications, Inc.
  • 4The Indenture imposes various covenants restricting the Issuers' ability to incur debt, pay dividends, and make investments.
  • 5A Change of Control provision requires the Issuers to offer to repurchase the Notes at 101% of principal in certain change of control events.
  • 6An Exchange and Registration Rights Agreement requires Charter to register the Notes within 365 days or incur additional interest payments.
  • 7The company may redeem the Notes prior to maturity, subject to make-whole premiums or at a premium in case of equity offerings.

Frequently Asked Questions

The primary purpose of this $1 billion debt issuance is to repay existing indebtedness under Charter Communications Operating, LLC's Amended and Restated Credit Agreement. This allows the company to refinance its debt, potentially at a more favorable interest rate or maturity, and manage its capital structure.

The 7.25% Senior Notes due 2017 are general unsecured obligations of the Issuers (CCO Holdings, LLC and CCO Holdings Capital Corp.). However, they are fully and unconditionally guaranteed on a senior unsecured basis by Charter Communications, Inc.

The Indenture imposes several restrictive covenants, including limitations on the ability of the Issuers to incur additional debt, pay dividends or make restricted payments, make certain investments, create liens, sell assets, merge with other entities, and engage in transactions with affiliates. These covenants are designed to protect the noteholders.

In the event of a Change of Control, as defined in the Indenture, the Issuers will be required to make an offer to purchase the Notes from the holders at a price equal to 101% of the principal amount, plus accrued and unpaid interest to the date of repurchase. This provides protection to investors against a significant change in the company's ownership or control.