Charter 2004 Annual Report Download - page 130

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 2004 FORM 10-K
Notes to Consolidated Financial Statements (continued)
Unrestricted subsidiaries generally will not be subject to the (engage in certain transactions with affiliates; and
restrictive covenants in the Charter Operating indenture. (grant liens.
In the event of specified change of control events, Charter
Operating must offer to purchase the Charter Operating notes at Charter Operating Credit Facilities. In April 2004, Charter Operat-
a purchase price equal to 101% of the total principal amount of ing amended and restated its $5.1 billion credit facilities, among
the Charter Operating notes repurchased plus any accrued and other things, to defer maturities and increase availability under
unpaid interest thereon. those facilities to approximately $6.5 billion, consisting of a
The indenture governing the Charter Operating senior $1.5 billion revolving credit facility with a maturity date in 2010;
notes contains restrictive covenants that limit certain transac- a $2.0 billion Term A loan facility of which 12.5% matures in
tions or activities by Charter Operating and its restricted 2007, 30% matures in 2008, 37.5% matures in 2009 and 20%
subsidiaries. Substantially all of Charter Operating’s direct and matures in 2010; and a $3.0 billion Term B loan facility which is
indirect subsidiaries are currently restricted subsidiaries. repayable in 27 equal quarterly installments aggregating in each
loan year to 1% of the original amount of the Term B facility,
Renaissance Notes. In connection with the acquisition of with the remaining balance due at final maturity in 2011.
Renaissance in April 1999, the Company assumed $163 million Charter Operating used the additional borrowings under the
principal amount at maturity of 10.000% senior discount notes amended and restated credit facilities, together with proceeds
due 2008 of which $49 million was repurchased in May 1999. from the sale of the Charter Operating senior second-lien notes
The Renaissance notes did not require the payment of interest to refinance the credit facilities of its subsidiaries, CC VI
until April 15, 2003. From and after April 15, 2003, the Operating, Falcon Cable, and CC VIII Operating, all in
Renaissance notes bear interest, payable semi-annually, on April concurrent transactions. In addition, Charter Operating was
15 and October 15, commencing on October 15, 2003. The substituted as the lender in place of the banks under those
Renaissance notes are due on April 15, 2008. subsidiaries’ credit facilities.
Amounts outstanding under the Charter Operating credit
CC V Holdings Notes. Charter Holdco acquired CC V Holdings facilities bear interest, at Charter Operating’s election, at a base
in November 1999 and assumed CC V Holdings’ outstanding rate or the Eurodollar rate (2.07% to 2.28% as of December 31,
11.875% senior discount notes due 2008 with an accreted value 2004), as defined, plus a margin for Eurodollar loans of up to
of $113 million as of December 31, 2003. Commencing 3.00% for the Term A facility and revolving credit facility, and
December 1, 2003, cash interest on the CC V Holdings up to 3.25% for the Term B facility, and for base rate loans of
11.875% notes will be payable semi-annually on June 1 and up to 2.00% for the Term A facility and revolving credit facility,
December 1 of each year. In February 2005, these notes were and up to 2.25% for the Term B facility. A quarterly
called with an anticipated redemption date of March 14, 2005. commitment fee of up to .75% is payable on the average daily
unborrowed balance of the revolving credit facilities.
High-Yield Restrictive Covenants; Limitation on Indebtedness. The The obligations of Charter’s subsidiaries under the Charter
indentures governing the notes of the Company’s subsidiaries Operating credit facilities (the ‘‘Obligations’’) are guaranteed by
contain certain covenants that restrict the ability of Charter Charter Operatings’ immediate parent company, CCO Holdings,
Holdings, Charter Capital, CCH II, CCH II Capital Corp., CCO and the subsidiaries of Charter Operating, except for immaterial
Holdings, CCO Holdings Capital Corp., Charter Operating, subsidiaries and subsidiaries precluded from guaranteeing by
Charter Communications Operating Capital Corp., the CC V reason of the provisions of other indebtedness to which they are
Holdings notes issuers, Renaissance Media Group, and all of subject (the ‘‘non-guarantor subsidiaries’’, primarily Renaissance
their restricted subsidiaries to: and CC V Holdings and their subsidiaries). The Obligations are
(incur additional debt; also secured by (i) a lien on all of the assets of Charter
Operating and its subsidiaries (other than assets of the non-
(pay dividends on equity or repurchase equity;
guarantor subsidiaries), to the extent such lien can be perfected
(make investments; under the Uniform Commercial Code by the filing of a
(sell all or substantially all of their assets or merge with or financing statement, and (ii) by a pledge by CCO Holdings of
into other companies; the equity interests owned by it in Charter Operating or any of
Charter Operating’s subsidiaries, as well as intercompany obliga-
(sell assets; tions owing to it by any of such entities. Upon the Charter
(enter into sale-leasebacks; Holdings Leverage Ratio (as defined in the indenture governing
the Charter Holdings senior notes and senior discount notes)
(in the case of restricted subsidiaries, create or permit to
being under 8.75 to 1.0, the Charter Operating credit facilities
exist dividend or payment restrictions with respect to the
require that the 11.875% notes due 2008 issued by CC V
bond issuers, guarantee their parent companies debt, or
Holdings, LLC be redeemed. Because such Leverage Ratio was
issue specified equity interests;
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