Charter 2004 Annual Report Download - page 58

CHARTER COMMUNICATIONS, INC. 2004 FORM 10-K
Cash interest on the May 2001 11.750% Charter Holdings notes The Charter Holdings 12.125% senior discount notes are
will not accrue prior to May 15, 2006. redeemable at the option of the issuers at amounts decreasing
The May 2001 Charter Holdings notes are senior debt from 106.063% to 100% of accreted value beginning January 15,
obligations of Charter Holdings and Charter Capital. They rank 2007.
equally with all other current and future unsubordinated In the event that a specified change of control event occurs,
obligations of Charter Holdings and Charter Capital. They are Charter Holdings and Charter Capital must offer to repurchase
structurally subordinated to the obligations of Charter Holdings’ any then outstanding January 2002 Charter Holdings notes at
subsidiaries, including the CCH II notes, the CCO Holdings 101% of their total principal amount or accreted value, as
notes, the Renaissance notes, the CC V Holdings notes, the applicable, plus accrued and unpaid interest, if any.
Charter Operating credit facilities and the Charter Operating The indentures governing the January 2002 Charter Hold-
notes. ings notes contain substantially identical events of default,
Charter Holdings and Charter Capital will not have the affirmative covenants and negative covenants as those contained
right to redeem the May 2001 9.625% Charter Holdings notes in the indentures governing the March 1999, January 2000,
prior to their maturity on November 15, 2009. On or after January 2001 and May 2001 Charter Holdings notes. See
May 15, 2006, Charter Holdings and Charter Capital may ‘‘— Summary of Restrictive Covenants under Charter Holdings
redeem some or all of the May 2001 10.000% Charter Holdings High-Yield Notes.’’
notes and the May 2001 11.750% Charter Holdings notes at any Summary of Restrictive Covenants under Charter Holdings High-Yield
time, in each case, at a premium. The optional redemption price Notes.
declines to 100% of the principal amount of the May 2001 The limitations on incurrence of debt and issuance of preferred
Charter Holdings notes redeemed, plus accrued and unpaid stock contained in Charter Holdings’ indentures permit Charter
interest, if any, for redemption on or after May 15, 2009. Holdings and its subsidiaries to incur additional debt or issue
In the event that a specified change of control event occurs, preferred stock, so long as there is no default under the Charter
Charter Holdings and Charter Capital must offer to repurchase Holdings indentures. These limitations restrict the incurrence of
any then outstanding May 2001 Charter Holdings notes at 101% debt unless, after giving effect to the incurrence, the Charter
of their total principal amount or accreted value, as applicable, Holdings Leverage Ratio would be below 8.75 to 1.0. In
plus accrued and unpaid interest, if any. addition, regardless of whether the leverage ratio could be met,
The indentures governing the May 2001 Charter Holdings so long as no default exists or would result from the incurrence
notes contain substantially identical events of default, affirmative or issuance, Charter Holdings and its restricted subsidiaries are
covenants and negative covenants as those contained in the permitted to issue:
indentures governing the March 1999, January 2000 and January
(up to $3.5 billion of debt under credit facilities,
2001 Charter Holdings notes. See ‘‘— Summary of Restrictive
Covenants under Charter Holdings High-Yield Notes.’’ (up to $75 million of debt incurred to finance the purchase
or capital lease of new assets,
January 2002 Charter Holdings Notes
The January 2002 Charter Holdings notes were issued under (up to $300 million of additional debt for any purpose,
three separate indentures, each among Charter Holdings and
(additional debt in an amount equal to 200% of proceeds of
Charter Capital, as the issuers, and BNY Midwest Trust new cash equity proceeds received by Charter Holdings
Company, as trustee, two of which were supplements to the and its restricted subsidiaries since March 1999, the date of
indentures for the May 2001 Charter Holdings notes. In July our first indenture, and not allocated for restricted pay-
2002, Charter Holdings and Charter Capital exchanged substan- ments or permitted investments, and
tially all of these notes for new notes, with substantially similar
terms, except that the new notes are registered under the (other items of indebtedness for specific purposes such as
Securities Act. intercompany debt, refinancing of existing debt, and interest
The January 2002 Charter Holdings notes are general rate swaps to provide protection against fluctuation in
unsecured obligations of Charter Holdings and Charter Capital. interest rates.
Cash interest on the January 2002 12.125% Charter Holdings Indebtedness under a single facility or agreement may be
notes will not accrue prior to January 15, 2007. incurred in part under one of the categories listed above and in
The January 2002 Charter Holdings notes are senior debt part under another. Accordingly, indebtedness under our credit
obligations of Charter Holdings and Charter Capital. They rank facilities is incurred under a combination of the categories of
equally with the current and future unsecured and permitted indebtedness listed above.
unsubordinated debt of Charter Holdings and Charter Capital. The restricted subsidiaries of Charter Holdings are generally
They are structurally subordinated to the obligations of Charter not permitted to issue debt securities contractually subordinated
Holdings’ subsidiaries, including the CCH II notes, the CCO to other debt of the issuing subsidiary or preferred stock, in
Holdings notes, the Renaissance notes, the CC V Holdings either case in any public or Rule 144A offering.
notes, the Charter Operating credit facilities and the Charter The Charter Holdings indentures permit Charter Holdings
Operating notes. and its restricted subsidiaries to incur debt under one category,
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