01—Abstract
Summary
Summary of the 8-K filed March 23, 2020. 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 closing of a significant debt issuance on March 18, 2020.
The company raised a total of $2.5 billiona by issuing new senior notes. This includes an additional $1.1 billion of 4.500% Senior Notes due 2030, which are fungible with previously issued notes, and $1.4 billion of new 4.500% Senior Notes due 2032. The issuance was made to qualified institutional buyers and non-U.S. persons under Rule 144A and Regulation S, respectively, indicating no immediate registration under the Securities Act.
This financing activity is noteworthy given the timing in March 2020, amidst increasing economic uncertainty. The company also provided updates regarding the redemption of its 5.250%b Senior Notes due 2022 and 5.125% Senior Notes due 2023, with redemption notices having been issued and conditions satisfied. Investors should note that these new notes are unsecured obligations of the CCOH Issuers and are not guaranteed by Charter Communications, Inc. The indentures governing these notes contain covenants that limit the issuers' ability to incur additional debt, pay dividends, make investments, and engage in other restricted activities, while also including provisions for accelerated repayment in the event of a Change of Control.
02—Key points
Key Highlights
- Charter Communications' subsidiaries (CCOH Issuers) closed the issuance of $2.5 billion in aggregate principal amount of Senior Notes.
- The issuance comprises $1.1 billion of 4.500% Senior Notes due 2030 and $1.4 billion of 4.500% Senior Notes due 2032.
- The 2030 notes are an "additional issuance" and will form part of the same series as previously issued 2030 notes.
- The notes were sold to qualified institutional buyers and non-U.S. persons in reliance on Rule 144A and Regulation S.
- The new notes are general unsecured obligations of the CCOH Issuers and are not guaranteed by Charter Communications, Inc.
- CCOH Issuers have initiated the redemption of their 5.250% Senior Notes due 2022 and 5.125% Senior Notes due 2023.
- The indentures include covenants that restrict debt incurrence, restricted payments, investments, and other activities, and provisions for a change of control offer to purchase.
03—Questions
Frequently Asked Questions
What is the total amount of debt issued by Charter's subsidiaries in this filing?
Charter's subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp., issued a total of $2.5 billion in aggregate principal amount of Senior Notes. This consists of $1.1 billion of 4.500% Senior Notes due 2030 and $1.4 billion of 4.500% Senior Notes due 2032.
Are these new notes guaranteed by Charter Communications, Inc.?
No, the filed documents specify that these new notes are general unsecured obligations of the CCOH Issuers (CCO Holdings, LLC and CCO Holdings Capital Corp.) and are not guaranteed by Charter Communications, Inc.
What happens in the event of a Change of Control?
In the event of a Change of Control, as defined in the respective supplemental indentures, the CCOH Issuers will be required to make an offer to purchase all outstanding Notes at a price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest.
What is the purpose of the Exchange and Registration Rights Agreement?
The Exchange and Registration Rights Agreement obligates the CCOH Issuers to file a registration statement with the SEC to allow for an offer to exchange these privately placed notes for substantially identical notes that are registered under the Securities Act. This process is intended to allow for more public trading of the notes. Failure to meet these obligations can result in the payment of additional interest to the noteholders.
04—Continue