8-KMaterial AgreementsFinancial EventsOther Events+1

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Material Agreement (Apr 20, 2018)

Filed April 20, 2018For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) filed an 8-K on April 20, 2018, to announce the successful issuance and sale of $800 million aggregate principal amount of 5.375% Senior Secured Notes due 2038 and $1.7 billion aggregate principal amount of 5.750% Senior Secured Notes due 2048. This substantial debt financing, totaling $2.5 billion, was completed on April 17, 2018, and is governed by a Ninth Supplemental Indenture to their existing Base Indenture. The Notes are senior secured obligations of Charter Communications Operating, LLC and Charter Communications Operating Capital Corp., with guarantees from CCO Holdings, LLC and other subsidiaries. The proceeds are expected to be used for general corporate purposes, though the specific use is not detailed in this filing. These new notes represent a significant addition to Charter's debt profile, extending maturities and potentially funding strategic initiatives or ongoing capital expenditures. Investors should note the senior secured nature of these obligations, meaning they are backed by a first-priority security interest in the company's assets alongside existing credit agreement obligations. The indenture includes customary covenants that may restrict future actions such as asset sales, mergers, and the creation of additional liens, which are important considerations for assessing the company's financial flexibility.

Key Highlights

  • 1Charter Communications, Inc. (CHTR) subsidiary, Charter Communications Operating, LLC, and Charter Communications Operating Capital Corp. issued $2.5 billion in new senior secured notes.
  • 2The issuance comprises $800 million of 5.375% Senior Secured Notes due 2038 and $1.7 billion of 5.750% Senior Secured Notes due 2048.
  • 3The notes are secured by a first-priority lien on the Issuers' and Guarantors' assets, ranking pari passu with obligations under the company's credit agreement.
  • 4CCO Holdings, LLC and other subsidiaries of Charter are providing senior secured guarantees for these notes.
  • 5The issuance was conducted under an automatic shelf registration statement previously filed with the SEC.
  • 6The indenture governing these notes includes covenants that limit asset sales, mergers, consolidations, and the incurrence of certain liens.

Frequently Asked Questions

Charter Communications, through its subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp., issued a total of $2.5 billion in new senior secured notes, consisting of $800 million in 5.375% notes due 2038 and $1.7 billion in 5.750% notes due 2048.

The notes are secured by a pari passu, first-priority security interest in the Issuers' and the Guarantors' assets. These assets are the same ones that secure obligations under Charter's credit agreement, subject to certain permitted liens.

The indenture includes customary covenants that may restrict Charter's ability to take certain actions, such as granting additional liens, selling all or substantially all of its assets, or engaging in mergers or consolidations with other entities. These restrictions are designed to protect the noteholders.

The 2038 Notes can be redeemed before October 1, 2037, at a price of 100% of the principal amount plus a make-whole premium and accrued interest. On or after October 1, 2037, they can be redeemed at par plus accrued interest. Similarly, the 2048 Notes can be redeemed before October 1, 2047, with a make-whole premium, and at par plus accrued interest on or after October 1, 2047.