8-KMaterial AgreementsFinancial EventsOther Events+1

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Material Agreement (Jan 14, 2011)

Filed January 14, 2011For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) announced on January 14, 2011, the completion of a significant financing transaction through its indirect subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp. The company successfully issued $1.1 billion in aggregate principal amount of 7.00% Senior Notes due 2019. The net proceeds from this debt issuance were intended to repay existing indebtedness under Charter Communications Operating, LLC's credit agreement. This move is a strategic step for Charter Communications to manage its capital structure and debt obligations, replacing older debt with new, longer-term notes. The issuance is guaranteed by the parent company, Charter Communications, Inc. Investors should note the terms of the Indenture governing these notes, which include restrictions on the company's ability to incur additional debt, pay dividends, make investments, and engage in asset sales or mergers. The notes are unsecured obligations of the Issuers and are subject to redemption provisions, including potential make-whole premiums before 2014 and standard redemption prices thereafter. A change of control event would trigger an offer to repurchase the notes at a premium.

Key Highlights

  • 1Completion of a $1.1 billion issuance of 7.00% Senior Notes due 2019 by CCO Holdings, LLC and CCO Holdings Capital Corp.
  • 2Net proceeds will be used to repay existing indebtedness under Charter Communications Operating, LLC's credit agreement.
  • 3The parent company, Charter Communications, Inc., provides full and unconditional senior unsecured guarantees for the notes.
  • 4The Indenture governing the notes imposes various covenants, including limitations on incurring additional debt, restricted payments, investments, and asset sales.
  • 5Company may redeem notes prior to January 15, 2014, at a premium (including a make-whole premium) or after January 15, 2014, at specified redemption prices.
  • 6A 'Change of Control' event would require the Issuers to offer to repurchase the notes at 101% of the principal amount plus accrued interest.
  • 7The notes are general unsecured obligations of the Issuers.

Frequently Asked Questions

The primary purpose of the $1.1 billion Senior Notes issuance was to repay existing indebtedness under Charter Communications Operating, LLC's Amended and Restated Credit Agreement. This is a refinancing activity aimed at managing the company's debt structure.

The 7.00% Senior Notes due 2019 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 the parent company, Charter Communications, Inc.

The Indenture places several restrictions on the Issuers and the Company. These include limitations on their ability to incur additional debt, pay dividends or make other restricted payments, make certain investments, create liens, sell assets, merge or consolidate, and enter into transactions with affiliates. There are also restrictions on subsidiaries' ability to pay dividends.

In the event of a 'Change of Control' as defined in the Indenture, the Issuers will be required to make an offer to purchase all outstanding Notes at a price equal to 101% of the principal amount, plus any accrued and unpaid interest to the repurchase date.