8-KMaterial AgreementsFinancial EventsRegulation FD+1

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Material Agreement (Dec 9, 2024)

Filed December 9, 2024For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) has filed an 8-K to report significant amendments to its existing credit agreement through Amendment No. 6. This amendment involves the restructuring of its debt facilities, including the establishment of a new class of Revolving C Commitments totaling $5.5 billion, the conversion of existing Term A-5 Loans into new Term A-7 Loans, and the replacement of certain Term B-2 Loans with a new tranche of Term B-5 Loans. These changes aim to optimize Charter's debt structure, extend maturity profiles, and introduce new borrowing capacities. Key impacts include the creation of substantial new revolving credit lines maturing in March 2030 and new term loans maturing in December 2031. Investors should note the new borrowing costs associated with these facilities, such as a SOFR plus 1.25% rate for Revolving C Commitments and Term A-7 Loans, and SOFR plus 2.25% for Term B-5 Loans. The company also made amendments to certain covenants and definitions, including 'Consolidated Operating Cash Flow'.

Key Highlights

  • 1Charter Communications' subsidiaries, CCO and CCO Holdings, entered into Amendment No. 6 to their Amended and Restated Credit Agreement on December 3, 2024.
  • 2A new class of Revolving C Commitments totaling $5.5 billion has been established, maturing on March 15, 2030, with pricing at SOFR + 1.25%.
  • 3A portion of existing Revolving B Commitments (approx. $960 million, maturing Aug 31, 2027) remains unchanged in pricing.
  • 4Existing Term A-5 Loans were converted to new Term A-7 Loans totaling approximately $4.5 billion, maturing March 15, 2030, at SOFR + 1.25%.
  • 5A new tranche of Term B-5 Loans totaling $2.5 billion has been introduced, maturing December 15, 2031, at SOFR + 2.25%, replacing certain Term B-2 Loans.
  • 6Remaining Term B-2 and Term A-5 Loans not converted were repaid concurrently with the amendment.
  • 7Amendments also include changes to defined terms such as 'Consolidated Operating Cash Flow' and certain negative covenants.

Frequently Asked Questions

The primary purpose of Amendment No. 6 is to restructure Charter's debt facilities. This includes establishing new borrowing capacities with extended maturity dates, converting existing loan tranches, and introducing new loan types to optimize the company's capital structure.

The amendment introduces Revolving C Commitments of $5.5 billion maturing in March 2030 with a rate of SOFR + 1.25%, and Term A-7 Loans of approximately $4.5 billion maturing in March 2030 with a rate of SOFR + 1.25%. Additionally, new Term B-5 Loans of $2.5 billion have been established maturing in December 2031 at a rate of SOFR + 2.25%.

Existing Term A-5 Loans were converted to Term A-7 Loans, and a portion of Term B-2 Loans were replaced by Term B-5 Loans. Any remaining Term B-2 and Term A-5 Loans that were not converted were repaid. The Revolving B Commitments of approximately $960 million remain with unchanged pricing.

Yes, Amendment No. 6 includes certain changes to defined terms, such as 'Consolidated Operating Cash Flow', and also modifies certain negative covenants within the credit agreement.