01—Abstract
Summary
Summary of the 8-K filed January 30, 2019. Cited figures are marked; the original filing is the authoritative source.
Charter Communications, Inc. (CHTR) announced on January 30, 2019, the closing of Amendment No. 1 to its credit facilities, effective January 24, 2019.
This amendment primarily involves significant adjustments to its debt structure, including an increase in the revolving credit facilities and the issuance of new term loans. These changes are aimed at providing Charter Operating with greater financial flexibility and extending the maturity of a portion of its debt. The key changes include an increase in the total revolving credit facility to $4.75 billiona from $4.0 billion, with a substantial portion now designated as Revolving B Commitments maturing in March 2024.
Additionally, Charter Operating borrowed an additional $1.7 billionb in Term A-3 Loans, also maturing in March 2024. The company also modified its guarantee and collateral agreements to allow for the release of guarantees and liens for certain de minimis subsidiaries, offering operational flexibility.
02—Key points
Key Highlights
- Charter Operating increased its revolving credit facilities to $4.75 billion from $4.0 billion.
- New Revolving B Commitments of $4.5015 billion were established, maturing on March 29, 2024.
- Charter Operating borrowed an additional $1.692 billion in Term A-3 Loans.
- Maturity dates for a portion of the debt have been extended to March 29, 2024.
- The company modified its guarantee and collateral agreements to permit the release of guarantees and liens for certain de minimis subsidiaries.
- Interest rates on revolving loans and term loans remain unchanged (Eurodollar Rate plus 1.50% or ABR plus 0.50%).
- The principal amount, interest rate, and maturity date of Term B Loans remain unchanged.
03—Questions
Frequently Asked Questions
What is the primary purpose of Amendment No. 1 to Charter's credit agreement?
The primary purpose of Amendment No. 1 is to increase the size of Charter Operating's revolving credit facilities, convert existing commitments, borrow additional term loans, and extend certain debt maturity dates, thereby enhancing financial flexibility and extending its debt profile.
How does the amendment affect Charter's total debt and its maturity profile?
The amendment increases the revolving credit facility by $750 million to $4.75 billion and adds approximately $1.7 billion in new term loans. A significant portion of these new and converted facilities now mature in March 2024, extending the maturity profile for these debt instruments.
What are the implications of changes to the guarantee and collateral agreement?
The changes allow Charter Operating, at its option, to release guarantees and liens on the assets of certain de minimis subsidiaries. This provides the company with greater operational flexibility regarding these specific subsidiaries.
Are the interest rates on Charter's debt changing due to this amendment?
No, the amendment explicitly states that the interest rates on the Revolving Loans (Eurodollar Rate plus 1.50% or ABR plus 0.50%) and the new Term A-3 Loans (which replaced existing Term A-2 Loans at the same rate structure) remain unchanged. The terms for the Term B Loans also remain unchanged.
04—Continue