01—Abstract
Summary
Summary of the 8-K filed April 26, 2017. Cited figures are marked; the original filing is the authoritative source.
Charter Communications, Inc. (CHTR), through its subsidiaries CCO Holdings, LLC and CCO Holdings Capital Corp., announced the issuance of an additional $1.25 billiona aggregate principal amount of 5.125% Senior Notes due 2027 on April 20, 2017.
These notes will form a larger series with previously issued notes, bringing the total to $2.25 billionb. The issuance was conducted under Rule 144A for qualified institutional buyers and Regulation S for non-U.S. persons, indicating they are privately placed and not publicly registered. Concurrently, Charter's operating subsidiaries, Charter Communications Operating, LLC and Charter Communications Operating Capital Corp., issued $1.25 billion aggregate principal amount of 5.375% Senior Secured Notes due 2047.
These secured notes also were sold under Rule 144A and Regulation S. These actions represent significant debt financing for the company, impacting its capital structure and leverage.
02—Key points
Key Highlights
- Charter Communications, through its CCO Holdings subsidiaries, issued an additional $1.25 billion of 5.125% Senior Notes due 2027.
- These new notes will be fungible with previously issued notes, bringing the total aggregate principal amount of the 5.125% Senior Notes due 2027 to $2.25 billion.
- Charter's operating subsidiaries issued $1.25 billion of 5.375% Senior Secured Notes due 2047.
- Both note issuances were private placements, sold to qualified institutional buyers (Rule 144A) and non-U.S. persons (Regulation S).
- The Senior Notes are general unsecured obligations of CCO Holdings, while the Senior Secured Notes are secured obligations of the CCO Issuers and Guarantors.
- The indentures for both note series contain covenants that limit the ability of the issuers to incur additional debt, make restricted payments, sell assets, and engage in other significant corporate actions.
- A Change of Control provision requires an offer to purchase the Senior Notes at 101% of the principal amount if certain change of control events occur.
03—Questions
Frequently Asked Questions
What is the total amount of debt raised through these issuances?
Charter Communications raised a total of $2.5 billion through these issuances: $1.25 billion in additional 5.125% Senior Notes due 2027 and $1.25 billion in 5.375% Senior Secured Notes due 2047.
Are these new notes publicly traded?
No, these notes were sold in private placements to qualified institutional buyers and non-U.S. persons under Rule 144A and Regulation S, respectively. They have not been registered under the Securities Act of 1933.
What is the difference between the Senior Notes and the Senior Secured Notes?
The 5.125% Senior Notes due 2027 are general unsecured obligations of CCO Holdings, LLC and CCO Holdings Capital Corp. The 5.375% Senior Secured Notes due 2047 are secured obligations of Charter Communications Operating, LLC, Charter Communications Operating Capital Corp., and their guarantors, meaning they are backed by collateral.
What restrictions are placed on Charter due to these new debt issuances?
The indentures for both note series include covenants that limit Charter's ability to incur more debt, pay dividends, make other restricted payments, sell assets, merge, or enter into affiliate transactions. These are standard protective measures for bondholders.
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