Summary
On December 17, 2012, Charter Communications, Inc. (CHTR) announced through its subsidiaries CCO Holdings, LLC and CCO Holdings Capital Corp. the successful issuance of $1.00 billion in aggregate principal amount of 5.125% Senior Notes due 2023. The net proceeds of approximately $988 million are designated for general corporate purposes, including the repayment of outstanding amounts under Charter's existing credit facilities. This offering was conducted under a shelf registration statement, indicating the company's proactive approach to managing its capital structure and financing needs.
Key Highlights
- 1Charter Communications (via subsidiaries) issued $1.00 billion of 5.125% Senior Notes due 2023 on December 17, 2012.
- 2Net proceeds from the issuance amounted to approximately $988 million after deducting underwriting discounts and commissions.
- 3Proceeds are earmarked for general corporate purposes, including repaying outstanding amounts under Charter's credit facilities.
- 4The Notes are guaranteed on a senior unsecured basis by Charter Communications, Inc.
- 5The Indenture governing the Notes includes covenants that may limit the company's ability to incur additional debt, make restricted payments, create liens, and engage in certain other corporate actions.
- 6A Change of Control provision requires the Issuers to offer to purchase the Notes at 101% of the principal amount plus accrued interest in the event of a Change of Control.
- 7Customary events of default are outlined in the Indenture, including non-payment, breach of covenants, and bankruptcy/insolvency.
Frequently Asked Questions
The primary purpose of issuing the $1.00 billion in Senior Notes was for general corporate purposes. This includes the intention to repay amounts outstanding under Charter Communications' existing credit facilities, thereby optimizing the company's debt structure and potentially reducing borrowing costs.
The Notes carry a 5.125% interest rate and mature in 2023. They are guaranteed by Charter Communications on a senior unsecured basis. The Indenture includes covenants that restrict the company's ability to incur more debt, pay dividends, make investments, and engage in other significant corporate actions. Notably, there is a provision requiring a purchase offer to noteholders in case of a Change of Control.
While the issuance provides $1.00 billion in capital for important purposes like debt reduction, the associated Indenture imposes certain restrictions. These covenants limit the company's flexibility in areas such as incurring additional debt, making restricted payments, and engaging in mergers or asset sales. Investors should review the Indenture details for a full understanding of these limitations.
The 'Change of Control' provision is an investor protection mechanism. If Charter Communications undergoes a significant change in ownership or control, as defined in the Indenture, the company is obligated to offer to repurchase these Senior Notes from investors at a premium (101% of the principal amount plus accrued interest). This protects noteholders from potential risks associated with new ownership.