8-KMaterial AgreementsFinancial EventsShareholder Matters+2

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Material Agreement (May 3, 2013)

Filed May 3, 2013For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) announced on May 3, 2013, significant financing activities undertaken by its subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp. These activities include the issuance of $1.0 billion in aggregate principal amount of 5.75% senior notes due 2024 and the establishment of a new $1.2 billion Term F Loan under its existing credit agreement. The primary purpose of the new senior notes issuance is to refinance existing debt, specifically to repurchase or redeem the company's 7.875% senior notes due 2018. The company also indicated that a substantial portion of the 2018 notes were tendered and accepted in a related offer, with the remainder being called for redemption. The proceeds from the new debt issuance are intended to reduce interest expenses and manage the company's debt maturity profile.

Key Highlights

  • 1Issued $1.0 billion of 5.75% senior notes due 2024 through subsidiaries CCO Holdings, LLC and CCO Holdings Capital Corp.
  • 2Secured $1.2 billion in new Term F Loan commitments under its existing credit agreement, which were fully drawn.
  • 3Used net proceeds from the senior notes issuance (approx. $988.5 million) to repurchase/redeem 7.875% senior notes due 2018 and for general corporate purposes.
  • 4Announced acceptance of approximately $296 million aggregate principal amount of 2018 Notes in a tender offer.
  • 5Irrevocably called for redemption on June 3, 2013, all remaining 2018 Notes not purchased in the tender offer.
  • 6The new Term F Loans were used to prepay and terminate existing Term C and Term D Loans.
  • 7Company held its Annual Meeting of Stockholders on April 30, 2013, where directors were elected and a stock incentive plan amendment was voted on.

Frequently Asked Questions

The primary purpose of the new 5.75% senior notes due 2024 is to refinance existing debt, specifically to repurchase or redeem the company's higher-interest 7.875% senior notes due 2018. Net proceeds will also be used for related fees, expenses, and general corporate purposes.

Charter Communications announced that it has repurchased approximately $296 million of its 2018 Notes through a tender offer. The remaining outstanding 2018 Notes have been irrevocably called for redemption on June 3, 2013, at a specified redemption price.

Charter Communications Operating, LLC established a new $1.2 billion Term F Loan, which was fully drawn. The proceeds from this new loan were used to prepay and terminate the company's existing Term C and Term D Loans, effectively refinancing that portion of its debt.

Yes, the Indenture governing the new senior notes includes covenants that limit the Issuers' ability to incur additional debt, pay dividends, make restricted payments, engage in certain investments, create liens, sell assets, merge or consolidate, and enter into affiliate transactions. It also includes a provision for a change of control offer to purchase the notes.