Charter 2003 Annual Report Download - page 77

they have received on a pro rata basis at a redemption price equal to 108.75% of the principal amount of CCO
Holdings senior notes redeemed, plus any accrued and unpaid interest.
On or after November 15, 2008, the issuers of the CCO Holdings senior notes may redeem all or a part of
the notes at a redemption price that declines ratably from the initial redemption price of 104.375% to a
redemption price on or after November 15, 2011 of 100.0% of the principal amount of the CCO Holdings
senior notes redeemed, plus, in each case, any accrued and unpaid interest.
In the event of speciÑed change of control events, CCO Holdings senior must oÅer to purchase the
outstanding CCO Holdings senior notes from the holders at a purchase price equal to 101% of the total
principal amount of the notes, plus any accrued and unpaid interest.
The indenture governing the CCO Holdings senior notes contains restrictive covenants that limit certain
transactions or activities by CCO Holdings and its restricted subsidiaries, including the covenants summarized
below. As of the issue date, all but two of CCO Holdings' direct and indirect subsidiaries were restricted
subsidiaries.
The covenant in the indenture governing the CCO Holdings senior notes that restricts incurrence of debt
and issuance of preferred stock permits CCO Holdings and its subsidiaries to incur or issue speciÑed amounts
of debt or preferred stock, if, after giving pro forma eÅect to the incurrence or issuance, CCO Holdings could
meet a leverage ratio (ratio of consolidated debt to four times EBITDA, as deÑned, from the most recent
Ñscal quarter for which internal Ñnancial reports are available) of 4.5 to 1.0.
In addition, regardless of whether the leverage ratio could be met, so long as no default exists or would
result from the incurrence or issuance, CCO Holdings and its restricted subsidiaries are permitted to incur or
issue:
‚ up to $9.75 billion of debt under credit facilities, including debt under credit facilities outstanding on
the issue date of the CCO Holdings senior notes,
‚ up to $75 million of debt incurred to Ñnance the purchase or capital lease of new assets,
‚ up to $300 million of additional debt for any purpose, and
‚ other items of indebtedness for speciÑc purposes such as intercompany debt, reÑnancing of existing
debt, and interest rate swaps to provide protection against Öuctuation in interest rates.
The restricted subsidiaries of CCO Holdings are generally not permitted to issue debt securities
contractually subordinated to other debt of the issuing subsidiary or preferred stock, in either case in any
public or Rule 144A oÅering.
The CCO Holdings indenture permits CCO Holdings and its restricted subsidiaries to incur debt under
one category, and later reclassify that debt into another category. Our subsidiaries' credit agreements generally
impose more restrictive limitations on incurring new debt than CCO Holdings' indenture, so our subsidiaries
that are subject to credit agreements are not permitted to utilize the full debt incurrence that would otherwise
be available under the CCO Holdings indenture covenants.
Generally, under CCO Holdings' indenture:
‚ CCO Holdings and its restricted subsidiaries are permitted to pay dividends on equity interests,
repurchase interests, or make other speciÑed restricted payments only if CCO Holdings can incur $1.00
of new debt under the leverage ratio test, which requires that CCO Holdings meet a 4.5 to 1.0 leverage
ratio after giving eÅect to the transaction, and if no default exists or would exist as a consequence of
such incurrence. If those conditions are met, restricted payments in a total amount of up to 100% of
CCO Holdings' consolidated EBITDA, as deÑned, minus 1.3 times its consolidated interest expense,
plus 100% of new cash and appraised non-cash equity proceeds received by CCO Holdings and not
allocated to the debt incurrence covenant, all cumulatively from the Ñscal quarter commenced
October 1, 2003, plus $100 million.
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