01—Abstract
Summary
Summary of the 8-K filed September 21, 2017. Cited figures are marked; the original filing is the authoritative source.
Charter Communications, Inc. (CHTR) filed an 8-K on September 21, 2017, detailing the closing of a significant debt issuance.
The company's subsidiaries, Charter Communications Operating, LLC and Charter Communications Operating Capital Corp., successfully issued a total of $750 milliona in 5.375% Senior Secured Notes due 2047 and $1.25 billion in 4.200% Senior Secured Notes due 2028. These notes are senior secured obligations, guaranteed by parent entities and certain subsidiaries, and are secured by a first-priority lien on the issuers' and guarantors' assets that also secure existing credit agreement obligations. This debt issuance, managed by Merrill Lynch and Citigroup, was sold to qualified institutional buyers and non-U.S. persons under Rule 144A and Regulation S, respectively, and was not registered under the Securities Act.
The filing also includes associated Indentures and Exchange and Registration Rights Agreements, which contain covenants limiting the company's ability to incur liens, sell assets, or merge. The company is obligated to file registration statements for these notes within specified timelines to avoid additional interest payments, indicating a proactive approach to managing its capital structure and compliance.
02—Key points
Key Highlights
- Charter Communications closed on the issuance of $750 million of 5.375% Senior Secured Notes due 2047 and $1.25 billion of 4.200% Senior Secured Notes due 2028.
- The total aggregate principal amount raised through this issuance is $2.0 billion.
- The notes are senior secured obligations of the Issuers and are guaranteed on a senior secured basis by Charter's Parent Guarantor and certain subsidiaries.
- The notes are secured by a first-priority security interest in the Issuers' and Guarantors' assets, subject to permitted liens.
- The issuance was conducted in reliance on Rule 144A and Regulation S, indicating sales to qualified institutional buyers and non-U.S. persons.
- Exchange and Registration Rights Agreements were entered into, requiring Charter to file registration statements for the notes within 365 days to avoid penalty interest payments.
03—Questions
Frequently Asked Questions
What was the total amount of debt raised by Charter Communications in this filing?
Charter Communications raised a total of $2.0 billion through the issuance of $750 million in 5.375% Senior Secured Notes due 2047 and $1.25 billion in 4.200% Senior Secured Notes due 2028.
Are these notes secured or unsecured debt?
These notes are classified as senior secured obligations. They are secured by a first-priority security interest in the Issuers' and Guarantors' assets, which also secure obligations under the company's credit agreement.
What are the key obligations Charter has regarding these new notes after issuance?
Charter Communications has entered into Exchange and Registration Rights Agreements. Under these agreements, the company is obligated to file registration statements for an exchange offer of these notes within 365 days of issuance. Failure to meet these obligations can result in the payment of additional interest to the noteholders.
Who purchased these notes, and how were they offered?
The notes were sold to persons reasonably believed to be qualified institutional buyers in the U.S. (under Rule 144A) and outside the United States to non-U.S. persons (under Regulation S). The notes were not registered under the Securities Act of 1933.
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