8-KMaterial AgreementsFinancial EventsOther Events+1

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Material Agreement (Jan 27, 2011)

Filed January 27, 2011For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) filed an 8-K on January 27, 2011, reporting on a material definitive agreement related to debt issuance. The company's indirect subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp., completed the private sale of $300 million in aggregate principal amount of 7.00% Senior Notes due 2019. These new notes are part of the same series as existing notes issued in January 2011, bringing the total aggregate principal amount of this note series to $1.4 billion. The net proceeds from this issuance were contributed to Charter Communications Operating, LLC, an indirect subsidiary, as a capital contribution. These funds are earmarked for the repayment of outstanding indebtedness under the company's Amended and Restated Credit Agreement. This debt refinancing activity is a key event for investors, indicating a strategic move to manage the company's leverage and potentially improve its debt maturity profile.

Key Highlights

  • 1Completion of private sale of $300 million 7.00% Senior Notes due 2019 by CCO Holdings, LLC and CCO Holdings Capital Corp.
  • 2The new notes are guaranteed by Charter Communications, Inc. on a senior unsecured basis.
  • 3The $300 million issuance adds to the previously issued $1.1 billion of the same note series, totaling $1.4 billion outstanding for the 7.00% Senior Notes due 2019.
  • 4Net proceeds will be used to repay existing indebtedness under Charter Communications Operating, LLC's credit agreement.
  • 5An Exchange and Registration Rights Agreement was entered into, requiring the company to register the notes for resale or exchange within 365 days, or face potential additional interest payments.
  • 6Potential for additional interest payments of 0.25% to 0.50% per annum if registration obligations are not met.

Frequently Asked Questions

The primary purpose of issuing the $300 million in Senior Notes due 2019 was to raise capital that would then be contributed to Charter Communications Operating, LLC. These funds are intended to repay existing indebtedness under the company's Amended and Restated Credit Agreement.

This issuance adds $300 million to Charter Communications' outstanding debt, specifically under the 7.00% Senior Notes due 2019 series. This increases the total principal amount of this note series to $1.4 billion. The proceeds are being used to refinance existing debt, which could impact the company's leverage ratios and debt maturity schedule.

The Exchange and Registration Rights Agreement requires Charter Communications to file a registration statement to allow for the exchange of these privately sold notes for substantially identical registered notes. This must be completed within 365 days of the closing date. Failure to meet these obligations could result in additional interest payments to noteholders, starting at 0.25% and potentially increasing to 0.50% per annum.

The payment obligations under the 7.00% Senior Notes due 2019 are fully and unconditionally guaranteed on a senior unsecured basis by Charter Communications, Inc. (the "Company").