01—Abstract
Summary
Summary of the 8-K filed April 27, 2021. 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 on April 27, 2021, the successful completion of a $1.0 billiona issuance of 4.500% Senior Notes due 2033.
These notes were sold to qualified institutional buyers and non-U.S. persons, utilizing exemptions under Rule 144A and Regulation S, respectively, meaning they were not registered under the Securities Act of 1933. The issuance was made under an Indenture, which governs the terms of the notes, including interest payments, redemption options, and covenants that restrict the CCOH Issuers' ability to incur additional debt, pay dividends, make investments, and engage in certain other financial activities.
Notably, the indenture includes provisions for a change of control offer, requiring the company to repurchase notes at 101%b of face value if a change of control event occurs. Events of default are also outlined, allowing for acceleration of the debt under specific circumstances.
02—Key points
Key Highlights
- Completed issuance of $1.0 billion aggregate principal amount of 4.500% Senior Notes due 2033 by subsidiaries CCO Holdings, LLC and CCO Holdings Capital Corp.
- Notes were sold to Qualified Institutional Buyers (Rule 144A) and non-U.S. persons (Regulation S).
- The notes are general unsecured obligations of the CCOH Issuers and are not guaranteed.
- Interest on the notes is payable semi-annually on June 1 and December 1, commencing December 1, 2021.
- The Indenture includes covenants that restrict the CCOH Issuers' ability to incur additional debt, pay dividends, make restricted payments, and engage in other financial activities.
- A Change of Control provision requires the CCOH Issuers to offer to repurchase all notes at 101% of principal if a Change of Control event occurs.
- An Exchange and Registration Rights Agreement was entered into, requiring the CCOH Issuers to file a registration statement for an exchange offer within 450 days, with potential penalties for default.
03—Questions
Frequently Asked Questions
What is the purpose of this 8-K filing?
This 8-K filing announces the closing of a material definitive agreement, specifically the issuance and sale of $1.0 billion of 4.500% Senior Notes due 2033 by Charter Communications' subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp.
What are the key terms of the new Senior Notes?
The notes carry a 4.500% coupon, mature in 2033, and were issued in a $1.0 billion aggregate principal amount. They are general unsecured obligations of the issuing subsidiaries and are not guaranteed. Interest is paid semi-annually, and the notes are redeemable under specific conditions, including a make-whole premium before June 1, 2027, and at set prices thereafter. A portion can also be redeemed using equity offering proceeds before June 1, 2024.
What restrictions are in place due to the new debt issuance?
The Indenture governing these notes imposes several restrictions on the CCOH Issuers. These include limitations on incurring additional debt, paying dividends, making restricted payments, certain investments, granting liens, restricting subsidiary payments, selling assets, merging, and engaging in affiliate transactions. These covenants are designed to protect the bondholders.
What happens in the event of a Change of Control?
If a Change of Control event occurs (as defined in the Sixth Supplemental Indenture), the CCOH Issuers are obligated to make an offer to purchase all of the outstanding Notes at a price of 101% of their aggregate principal amount, plus accrued and unpaid interest.
04—Continue