Charter 2004 Annual Report Download - page 129

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 2004 FORM 10-K
Notes to Consolidated Financial Statements (continued)
ings notes, the Charter Operating credit facilities and the activities by CCO Holdings and its restricted subsidiaries.
Charter Operating notes. Substantially all of CCO Holdings’ direct and indirect subsidiar-
Interest on the CCO Holdings senior notes accrues at ies are currently restricted subsidiaries.
83
/4% per year and is payable semi-annually in arrears on each Charter Operating Notes. On April 27, 2004, Charter Operating
May 15 and November 15.
and Charter Communications Operating Capital Corp. jointly
At any time prior to November 15, 2006, the issuers of the
issued $1.1 billion of 8% senior second-lien notes due 2012 and
CCO Holdings senior notes may redeem up to 35% of the total
$400 million of 83/8% senior second-lien notes due 2014, for
principal amount of the CCO Holdings senior notes to the
total gross proceeds of $1.5 billion. Interest on the Charter
extent of public equity proceeds they have received on a pro
Operating notes is payable semi-annually in arrears on each
rata basis at a redemption price equal to 108.75% of the
April 30 and October 30, commencing on October 30, 2004.
principal amount of CCO Holdings senior notes redeemed, plus
The Charter Operating notes were sold in a private
any accrued and unpaid interest.
transaction that was not subject to the registration requirements
On or after November 15, 2008, the issuers of the CCO
of the Securities Act of 1933. The Charter Operating notes are
Holdings senior notes may redeem all or a part of the notes at a
not expected to have the benefit of any exchange or other
redemption price that declines ratably from the initial redemp-
registration rights, except in specified limited circumstances. On
tion price of 104.375% to a redemption price on or after
the issue date of the Charter Operating notes, because of
November 15, 2011 of 100.0% of the principal amount of the
restrictions contained in the Charter Holdings indentures, there
CCO Holdings senior notes redeemed, plus, in each case, any
were no Charter Operating note guarantees, even though
accrued and unpaid interest.
Charter Operating’s immediate parent, CCO Holdings, and
In the event of specified change of control events, CCO
certain of the Company’s subsidiaries were obligors and/or
Holdings must offer to purchase the outstanding CCO Holdings
guarantors under the Charter Operating credit facilities. Upon
senior notes from the holders at a purchase price equal to 101%
the occurrence of the guarantee and pledge date (generally, the
of the total principal amount of the notes, plus any accrued and
fifth business day after the Charter Holdings leverage ratio is
unpaid interest.
certified to be below 8.75 to 1.0), CCO Holdings and those
Senior Floating Rate Notes Due 2010 subsidiaries of Charter Operating that are then guarantors of, or
In December 2004, CCO Holdings and CCO Holdings Capital otherwise obligors with respect to, indebtedness under the
Corp. jointly issued $550 million total principal amount of senior Charter Operating credit facilities and related obligations will be
floating rate notes due 2010. required to guarantee the Charter Operating notes. The note
Interest on the CCO Holdings senior floating rate notes guarantee of each such guarantor will be:
accrues at the LIBOR rate plus 4.125% annually, from Decem-
ber 15, 2004 or, if interest already has been paid, from the date (a senior obligation of such guarantor;
it was most recently paid. Interest is reset and payable quarterly (structurally senior to the outstanding senior notes of CCO
in arrears on each March 15, June 15, September 15 and Holdings and CCO Holdings Capital Corp. (except in the
December 15, commencing on March 15, 2005. case of CCO Holdings’ note guarantee, which ranks equally
At any time prior to December 15, 2006, the issuers of the with such senior notes), the outstanding senior notes of
senior floating rate notes may redeem up to 35% of the notes in CCH II and CCH II Capital Corp., the outstanding senior
an amount not to exceed the amount of proceeds of one or notes and senior discount notes of Charter Holdings and
more public equity offerings at a redemption price equal to the outstanding convertible senior notes of Charter (but
100% of the principal amount, plus a premium equal to the subject to provisions in the Charter Operating indenture
interest rate per annum applicable to the notes on the date that permit interest and, subject to meeting the 4.25 to 1.0
notice of redemption is given, plus accrued and unpaid interest, leverage ratio test, principal payments to be made
if any, to the redemption date, provided that at least 65% of the thereon); and
original aggregate principal amount of the notes issued remains
(senior in right of payment to any future subordinated
outstanding after the redemption.
indebtedness of such guarantor.
The issuers of the senior floating rate notes may redeem
the notes in whole or in part at the issuers’ option from As a result of the above leverage ratio test being met, CCO
December 15, 2006 until December 14, 2007 for 102% of the Holdings and certain of its subsidiaries provided the additional
principal amount, from December 15, 2007 until December 14, guarantees described above during the first quarter of 2005.
2008 for 101% of the principal amount and from and after All the subsidiaries of Charter Operating (except CCO NR
December 15, 2008, at par, in each case, plus accrued and Sub, LLC, and certain other subsidiaries that are not deemed
unpaid interest. material and are designated as nonrecourse subsidiaries under
The indentures governing the CCO Holdings senior notes the Charter Operating credit facilities) are restricted subsidiaries
contain restrictive covenants that limit certain transactions or of Charter Operating under the Charter Operating notes.
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