8-KMaterial AgreementsFinancial EventsRegulation FD+1

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Material Agreement (Feb 16, 2023)

Filed February 16, 2023For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) announced through its subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp., the successful issuance of $1.1 billion aggregate principal amount of 7.375% Senior Notes due 2031. These notes were sold to qualified institutional buyers and non-U.S. persons, indicating a significant debt financing event for the company. The issuance is detailed in an Indenture and a related Registration Rights Agreement, which outlines the terms, covenants, and obligations, including potential for an exchange offer to register the notes under the Securities Act. Additionally, Charter's operating subsidiaries entered into Amendment No. 3 to their Amended and Restated Credit Agreement, primarily to replace LIBOR with Term SOFR as the benchmark rate for their Term B Loans. This amendment also reflects the outstanding principal amounts and pricing for the Term B-1 and Term B-2 Loans. These actions represent strategic financial management aimed at optimizing the company's debt structure and borrowing costs.

Key Highlights

  • 1Completion of $1.1 billion issuance of 7.375% Senior Notes due 2031 by CCO Holdings, LLC and CCO Holdings Capital Corp.
  • 2Notes were sold to qualified institutional buyers (Rule 144A) and non-U.S. persons (Regulation S).
  • 3The Indenture includes covenants that limit the issuers' ability to incur additional debt, pay dividends, make investments, and engage in mergers or asset sales.
  • 4A Change of Control Triggering Event would require CCOH Issuers to offer to repurchase the Notes at 101% of principal plus accrued interest.
  • 5Registration Rights Agreement mandates filing a registration statement or consummating an exchange offer within 450 days, with potential for additional interest if defaults occur.
  • 6Amendment No. 3 to the Amended and Restated Credit Agreement replaces LIBOR with Term SOFR for Term B Loans.
  • 7Post-amendment, Term B-1 Loans total $2.3 billion at Term SOFR + 1.75%, and Term B-2 Loans total $3.7 billion at Term SOFR + 1.75%.

Frequently Asked Questions

The primary purpose of the issuance is to raise capital. While the filing doesn't explicitly state the use of proceeds, such financings are typically used for general corporate purposes, capital expenditures, refinancing existing debt, or strategic initiatives.

The Indenture imposes several covenants, including limitations on incurring additional debt, paying dividends and making restricted payments, making certain investments, granting liens, and restrictions on subsidiary dividend payments, asset sales, mergers, and affiliate transactions. These are designed to protect the noteholders by maintaining the credit quality of the issuers.

The transition from LIBOR to SOFR (Secured Overnight Financing Rate) is a global industry effort to move away from the LIBOR benchmark rate, which is being phased out. Term SOFR is a more robust and market-reflective benchmark that provides greater stability and transparency for floating-rate loans.

In the event of a 'Change of Control Triggering Event' as defined in the Indenture, holders of the Senior Notes have the right to require the CCOH Issuers to repurchase their notes at a price of 101% of the principal amount, plus accrued and unpaid interest.