Charter 2004 Annual Report Download - page 62

CHARTER COMMUNICATIONS, INC. 2004 FORM 10-K
The issuers of the senior floating rate notes may redeem to other debt of the issuing subsidiary or preferred stock, in
the notes in whole or in part at the issuers’ option from either case in any public or Rule 144A offering.
December 15, 2006 until December 14, 2007 for 102% of the The CCO Holdings indenture permits CCO Holdings and
principal amount, from December 15, 2007 until December 14, its restricted subsidiaries to incur debt under one category, and
2008 for 101% of the principal amount and from and after later reclassify that debt into another category. The Charter
December 15, 2008, at par, in each case, plus accrued and Operating credit facilities generally impose more restrictive
unpaid interest. limitations on incurring new debt than CCO Holdings’ inden-
ture, so our subsidiaries that are subject to credit facilities are
Additional terms of the CCO Holdings Senior Notes and Senior not permitted to utilize the full debt incurrence that would
Floating Rate Notes otherwise be available under the CCO Holdings indenture
The CCO Holdings notes are general unsecured obligations of covenants.
CCO Holdings and CCO Holdings Capital Corp. They rank Generally, under CCO Holdings’ indenture:
equally with all other current or future unsubordinated obliga-
(CCO Holdings and its restricted subsidiaries are permitted
tions of CCO Holdings and CCO Holdings Capital Corp. The
to pay dividends on equity interests, repurchase interests, or
CCO Holdings notes are structurally subordinated to all
make other specified restricted payments only if CCO
obligations of subsidiaries of CCO Holdings, including the
Holdings can incur $1.00 of new debt under the leverage
Renaissance notes, the CC V Holdings notes, the Charter
ratio test, which requires that CCO Holdings meet a 4.5 to
Operating notes and the Charter Operating credit facilities.
1.0 leverage ratio after giving effect to the transaction, and
In the event of specified change of control events, CCO
if no default exists or would exist as a consequence of such
Holdings must offer to purchase the outstanding CCO Holdings
incurrence. If those conditions are met, restricted payments
senior notes from the holders at a purchase price equal to 101%
in a total amount of up to 100% of CCO Holdings’
of the total principal amount of the notes, plus any accrued and
consolidated EBITDA, as defined, minus 1.3 times its
unpaid interest.
consolidated interest expense, plus 100% of new cash and
The indenture governing the CCO Holdings senior notes
appraised non-cash equity proceeds received by CCO
contains restrictive covenants that limit certain transactions or
Holdings and not allocated to the debt incurrence cove-
activities by CCO Holdings and its restricted subsidiaries,
nant, all cumulatively from the fiscal quarter commenced
including the covenants summarized below. Substantially all of
October 1, 2003, plus $100 million.
CCO Holdings’ direct and indirect subsidiaries are currently
In addition, CCO Holdings may make distributions or
restricted subsidiaries.
restricted payments, so long as no default exists or would be
The covenant in the indenture governing the CCO Hold-
caused by the transaction:
ings senior notes that restricts incurrence of debt and issuance of
preferred stock permits CCO Holdings and its subsidiaries to (to repurchase management equity interests in amounts not
incur or issue specified amounts of debt or preferred stock, if, to exceed $10 million per fiscal year;
after giving pro forma effect to the incurrence or issuance, CCO
(to pay, regardless of the existence of any default, pass-
Holdings could meet a leverage ratio (ratio of consolidated debt through tax liabilities in respect of ownership of equity
to four times EBITDA, as defined, from the most recent fiscal interests in Charter Holdings or its restricted subsidiaries;
quarter for which internal financial reports are available) of
4.5 to 1.0. (to pay, regardless of the existence of any default, interest
In addition, regardless of whether the leverage ratio could when due on Charter Holdings notes and our notes;
be met, so long as no default exists or would result from the (to pay, so long as there is no default, interest on the
incurrence or issuance, CCO Holdings and its restricted subsidi- Charter convertible notes;
aries are permitted to incur or issue:
(to purchase, redeem or refinance Charter Holdings notes,
(up to $9.75 billion of debt under credit facilities, including CCH II notes, Charter notes, and other direct or indirect
debt under credit facilities outstanding on the issue date of parent company notes, so long as CCO Holdings could
the CCO Holdings senior notes, incur $1.00 of indebtedness under the 4.5 to 1.0 leverage
(up to $75 million of debt incurred to finance the purchase ratio test referred to above and there is no default; or
or capital lease of new assets, (to make other specified restricted payments including
(up to $300 million of additional debt for any purpose, and merger fees up to 1.25% of the transaction value, repur-
chases using concurrent new issuances, and certain divi-
(other items of indebtedness for specific purposes such as dends on existing subsidiary preferred equity interests.
intercompany debt, refinancing of existing debt, and interest The indenture governing the CCO Holdings senior notes
rate swaps to provide protection against fluctuation in restricts CCO Holdings and its restricted subsidiaries from
interest rates. making investments, except specified permitted investments, or
The restricted subsidiaries of CCO Holdings are generally creating new unrestricted subsidiaries, if there is a default under
not permitted to issue debt securities contractually subordinated the indenture or if CCO Holdings could not incur $1.00 of new
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