Summary
Charter Communications, Inc. (CHTR) filed this Form 8-K on December 20, 2011, to report on the successful completion of a public offering of $750 million aggregate principal amount of 7.375% Senior Notes due 2020 by its indirect subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp. The net proceeds, approximately $740.25 million, are earmarked for significant debt management activities, including tender offers for existing 8.0% and 10.875% second lien notes of Charter Operating, LLC, and 13.5% senior notes of CCH II, LLC. This strategic move aims to refinance and potentially reduce outstanding debt obligations.
Key Highlights
- 1Completion of $750 million in 7.375% Senior Notes due 2020 issuance by CCO Holdings, LLC and CCO Holdings Capital Corp.
- 2Net proceeds of approximately $740.25 million raised from the note issuance.
- 3Proceeds will be used for tender offers to repurchase existing debt, including Charter Operating's 8.0% and 10.875% second lien notes and CCH II's 13.5% senior notes.
- 4The notes are guaranteed on a senior unsecured basis by Charter Communications, Inc.
- 5The Indenture includes covenants that limit the issuers' ability to incur additional debt, pay dividends, make restricted payments, and engage in certain other corporate actions.
- 6A Change of Control provision requires an offer to purchase the notes at 101% of principal amount under specific circumstances.
- 7Early tender results show significant participation in the debt repurchases, with substantial amounts tendered for all targeted note series.
Frequently Asked Questions
This Form 8-K filing reports the closing of a $750 million public offering of 7.375% Senior Notes due 2020 by Charter Communications' indirect subsidiaries. The proceeds are intended to fund tender offers aimed at repurchasing existing, higher-interest debt.
The net proceeds of approximately $740.25 million will be used primarily to make tender offers for certain existing notes of Charter Operating, LLC and CCH II, LLC, with any remaining funds potentially used for intercompany loans and general corporate purposes.
The Notes are guaranteed by Charter Communications, Inc., are unsecured obligations of the issuers, and carry a 7.375% interest rate payable semi-annually. The Indenture includes covenants that restrict debt incurrence, dividend payments, and other corporate actions. It also contains a change of control provision requiring a purchase offer to noteholders.
Initial results indicate strong participation from holders of the targeted debt. Approximately $407 million of Charter Operating's 8.00% notes, $234 million of its 10.875% notes, and $668 million of CCH II's 13.50% notes were validly tendered by the early tender date.