8-KOther EventsExhibits & Filings

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Corporate Update (Jan 17, 2012)

Filed January 17, 2012For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) has announced a significant debt refinancing initiative through its subsidiaries. CCO Holdings, LLC and CCO Holdings Capital Corp. are issuing $750 million in aggregate principal amount of senior unsecured notes due 2022, bearing a 6.625% interest rate. The proceeds from this offering, along with borrowings under its revolving credit facility, are earmarked to finance tender offers for existing debt. This refinancing aims to repurchase substantially all outstanding 8.00% senior second lien notes due 2012 and 10.875% senior second lien notes due 2014, issued by Charter Communications Operating, LLC. Additionally, CCH II, LLC is offering to purchase its 13.50% senior notes due 2016. This move also includes consent solicitations to amend the indentures of the 2012 and 2014 notes, seeking to remove restrictive covenants and certain events of default, which could streamline future operations and financial flexibility.

Key Highlights

  • 1Charter Communications is issuing $750 million in new 6.625% senior unsecured notes due 2022 through its subsidiaries.
  • 2The proceeds will be used to fund tender offers for existing debt, specifically 8.00% Senior Second Lien Notes due 2012 and 10.875% Senior Second Lien Notes due 2014.
  • 3A separate offer from CCH II, LLC targets the repurchase of up to $250 million of its 13.50% Senior Notes due 2016.
  • 4Charter is also soliciting consents to amend the indentures of the 2012 and 2014 notes, aiming to remove restrictive covenants and certain events of default.
  • 5The early tender and consent deadline is January 25, 2012, with tender offers generally expiring on February 8, 2012.
  • 6This debt restructuring indicates a strategy to reduce interest expenses and improve financial flexibility by replacing higher-cost debt and removing restrictive covenants.

Frequently Asked Questions

The main purpose is to announce Charter Communications' plan to issue new debt and use the proceeds to repurchase its existing debt. This also includes seeking consent to amend the terms of some of its existing notes, aiming to reduce interest costs and gain more financial flexibility.

Charter's subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp., are issuing $750 million in aggregate principal amount of senior unsecured notes due 2022. These notes will bear an interest rate of 6.625% per annum and are being offered at 99.50% of their principal amount.

Charter Operating, LLC is making an offer to buy back any and all of its outstanding 8.00% Senior Second Lien Notes due 2012 and 10.875% Senior Second Lien Notes due 2014. Additionally, CCH II, LLC is offering to buy back up to $250 million of its 13.50% Senior Notes due 2016.

The company is asking holders of the 2012 and 2014 notes to agree to amendments that would remove most of the restrictive covenants and certain events of default from the agreements governing these notes. This could provide Charter with greater operational and financial freedom.