01—Abstract
Summary
Summary of the 8-K filed June 2, 2021. Cited figures are marked; the original filing is the authoritative source.
Charter Communications, Inc. (CHTR) announced via an 8-K filing on June 2, 2021, the completion of significant debt issuances by its subsidiaries, CCO Holdings, LLC and Charter Communications Operating, LLC.
These transactions involved the issuance of $750 milliona in 4.500% Senior Notes due 2033 by CCO Holdings, which will be fungible with existing notes, and the issuance of $1.4 billion in 3.900% Senior Secured Notes due 2052 and $1.4 billion in 4.400% Senior Secured Notes due 2061 by Charter Communications Operating. These offerings are part of the company's ongoing strategy to manage its capital structure and fund its operations. The new notes are subject to various covenants, including limitations on additional debt, restricted payments, asset sales, and change of control provisions.
The senior secured notes are backed by a first-priority security interest in the issuers' and guarantors' assets. The company has also entered into registration rights agreements to allow for the eventual registration of these notes under the Securities Act.
02—Key points
Key Highlights
- Issuance of $750 million aggregate principal amount of 4.500% Senior Notes due 2033 by CCO Holdings, LLC and CCO Holdings Capital Corp.
- Issuance of $1.4 billion aggregate principal amount of 3.900% Senior Secured Notes due 2052 by Charter Communications Operating, LLC and Charter Communications Operating Capital Corp.
- Issuance of $1.4 billion aggregate principal amount of 4.400% Senior Secured Notes due 2061 by Charter Communications Operating, LLC and Charter Communications Operating Capital Corp.
- The new CCOH 2033 Notes are fungible with existing notes of the same series issued in April 2021.
- The CCO Notes are senior secured obligations, guaranteed on a senior secured basis by CCO Holdings, LLC and other subsidiaries, and secured by a first-priority lien on specified assets.
- The indentures governing these notes contain covenants that limit the ability of the issuers to incur additional debt, make restricted payments, sell assets, and undergo a change of control.
- The company has entered into registration rights agreements for the New CCOH 2033 Notes to facilitate their eventual registration.
03—Questions
Frequently Asked Questions
What is the total amount of new debt issued by Charter Communications' subsidiaries in this filing?
In this filing, Charter Communications' subsidiaries have issued a total of $3.55 billion in new debt: $750 million in 4.500% Senior Notes due 2033, $1.4 billion in 3.900% Senior Secured Notes due 2052, and $1.4 billion in 4.400% Senior Secured Notes due 2061.
Are the new CCOH 2033 Notes guaranteed?
No, the 4.500% Senior Notes due 2033 issued by CCO Holdings, LLC and CCO Holdings Capital Corp. are general unsecured obligations of the issuers and are not guaranteed.
What are the key features of the new Senior Secured Notes (CCO Notes)?
The new Senior Secured Notes (CCO 2052 Notes and CCO 2061 Notes) are senior secured obligations of Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. They are guaranteed on a senior secured basis by CCO Holdings, LLC (the Parent Guarantor) and other subsidiary guarantors. The notes and guarantees are secured by a first-priority security interest in the issuers' and guarantors' assets that also secure obligations under their credit agreement.
What are the implications of the covenants within the indentures for investors?
The covenants in the indentures generally restrict the ability of the issuers and their subsidiaries to take certain actions that could negatively impact the bondholders' interests. These include limitations on incurring additional debt, making distributions or restricted payments, selling assets, and engaging in mergers or consolidations. There are also provisions for a mandatory repurchase offer in the event of a Change of Control.
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