01—Abstract
Summary
Summary of the 8-K filed October 30, 2019. Cited figures are marked; the original filing is the authoritative source.
Charter Communications, Inc. (CHTR) filed an 8-K on October 30, 2019, detailing several significant financing activities.
The company, through its subsidiaries CCO Holdings, LLC and CCO Holdings Capital Corp., issued an additional $500 milliona of 4.750% Senior Notes due 2030, bringing the total outstanding of this series to $1.85 billion. Concurrently, Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. issued $1.50 billion of 4.800% Senior Secured Notes due 2050. In addition to these debt issuances, the company also amended its Amended and Restated Credit Agreement.
This amendment involved converting existing Term B and Term A loans into new tranches with varying maturity dates and interest rate options (Eurodollar or ABR), and extending the maturity and reducing pricing on a significant portion of its revolving credit facility. These actions indicate proactive debt management and a strategic approach to capital structure by Charter Communications.
02—Key points
Key Highlights
- Charter Communications, through its subsidiaries, issued an additional $500 million in 4.750% Senior Notes due 2030.
- The new 2030 Notes are fungible with previously issued notes of the same series, bringing the total outstanding to $1.85 billion.
- Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. issued $1.50 billion in 4.800% Senior Secured Notes due 2050.
- The 2050 Notes are secured by a pari passu, first priority security interest in the issuers' and guarantors' assets, subject to permitted liens.
- An amendment to the credit agreement restructured existing Term B and Term A loans into new tranches with adjusted maturity dates and interest rates.
- The revolving credit facility maturity was extended, and its pricing was reduced for approximately $4.5 billion of commitments.
- The company entered into a Registration Rights Agreement requiring it to register the new 2030 Notes within 450 days or face additional interest payments.
03—Questions
Frequently Asked Questions
What is the total amount of new debt issued by Charter Communications in this filing?
Charter Communications, through its subsidiaries, issued a total of $2.0 billion in new debt, comprising $500 million of 4.750% Senior Notes due 2030 and $1.50 billion of 4.800% Senior Secured Notes due 2050.
What is the purpose of the additional 4.750% Senior Notes due 2030?
The additional 4.750% Senior Notes due 2030 were issued to supplement the existing notes of the same series, effectively increasing the total outstanding principal amount of these notes to $1.85 billion. These notes are general unsecured obligations of the CCOH Issuers.
How does the amendment to the credit agreement impact Charter's debt structure?
The amendment restructured existing loans and extended the maturity of a significant portion of the revolving credit facility. Specifically, it converted Term B and Term A loans into new tranches (Term B-1, Term B-2, Term A-4) with different maturity dates and interest rate options, and adjusted the terms of the revolving credit facility to potentially lower borrowing costs and extend repayment timelines.
Are the new Senior Secured Notes due 2050 backed by collateral?
Yes, the 4.800% Senior Secured Notes due 2050 are senior secured obligations and are guaranteed on a senior secured basis by the Parent Guarantor and other subsidiary guarantors. They are secured by a pari passu, first priority security interest in the assets of the CCO Issuers and the Guarantors that also secure obligations under the credit agreement.
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