Charter 2005 Annual Report Download - page 143

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 2005 FORM 10-K
Notes to Consolidated Financial Statements (continued)
principal amount of its 83 /8% senior second-lien notes due 2014 The indenture governing the Charter Operating senior
in exchange for approximately $346 million of the Charter notes contains restrictive covenants that limit certain transac-
Holdings 8.25% senior notes due 2007. Interest on the Charter tions or activities by Charter Operating and its restricted
Operating notes is payable semi-annually in arrears on each subsidiaries. Substantially all of Charter Operating’s direct and
April 30 and October 30. indirect subsidiaries are currently restricted subsidiaries.
The Charter Operating notes were sold in a private Renaissance Notes. In connection with the acquisition of Renais-
transaction that was not subject to the registration requirements sance in April 1999, the Company assumed $163 million
of the Securities Act of 1933. The Charter Operating notes are principal amount at maturity of 10.000% senior discount notes
not expected to have the benefit of any exchange or other due 2008 of which $49 million was repurchased in May 1999.
registration rights, except in specified limited circumstances. On The Renaissance notes bear interest, payable semi-annually, on
the issue date of the Charter Operating notes, because of April 15 and October 15. The Renaissance notes are due on
restrictions contained in the Charter Holdings indentures, there April 15, 2008. As of December 31, 2005, there was $114 mil-
were no Charter Operating note guarantees, even though lion in total principal amount outstanding and $115 million in
Charter Operating’s immediate parent, CCO Holdings, and accreted value outstanding.
certain of the Company’s subsidiaries were obligors and/or
guarantors under the Charter Operating credit facilities. Upon CC V Holdings Notes. These notes were redeemed on March 14,
the occurrence of the guarantee and pledge date (generally, the 2005 and are therefore no longer outstanding.
fifth business day after the Charter Holdings leverage ratio was High-yield restrictive covenants; limitation on indebtedness. The
certified to be below 8.75 to 1.0), CCO Holdings and those indentures governing the notes of the Company’s subsidiaries
subsidiaries of Charter Operating that were then guarantors of, contain certain covenants that restrict the ability of Charter
or otherwise obligors with respect to, indebtedness under the Holdings, Charter Capital, CIH, CIH, Capital Corp., CCH I,
Charter Operating credit facilities and related obligations were CCH I Capital Corp., CCH II, CCH II Capital Corp., CCO
required to guarantee the Charter Operating notes. The note Holdings, CCO Holdings Capital Corp., Charter Operating,
guarantee of each such guarantor is: Charter Communications Operating Capital Corp., Renaissance
(a senior obligation of such guarantor; Media Group, and all of their restricted subsidiaries to:
(structurally senior to the outstanding CCO Holdings notes (incur additional debt;
(except in the case of CCO Holdings’ note guarantee, (pay dividends on equity or repurchase equity;
which is structurally pari passu with such senior notes), the
(make investments;
outstanding CCH II notes, the outstanding CCH I notes,
the outstanding CIH notes, the outstanding Charter Hold- (sell all or substantially all of their assets or merge with or
ings notes and the outstanding Charter convertible senior into other companies;
notes (but subject to provisions in the Charter Operating
(sell assets;
indenture that permit interest and, subject to meeting the
4.25 to 1.0 leverage ratio test, principal payments to be (enter into sale-leasebacks;
made thereon); and (in the case of restricted subsidiaries, create or permit to
(senior in right of payment to any future subordinated exist dividend or payment restrictions with respect to the
indebtedness of such guarantor. bond issuers, guarantee their parent companies debt, or
issue specified equity interests;
As a result of the above leverage ratio test being met, CCO
Holdings and certain of its subsidiaries provided the additional (engage in certain transactions with affiliates; and
guarantees described above during the first quarter of 2005. (grant liens.
All the subsidiaries of Charter Operating (except CCO NR
Sub, LLC, and certain other subsidiaries that are not deemed Charter Operating Credit Facilities. The Charter Operating credit
material and are designated as nonrecourse subsidiaries under facilities were amended and restated concurrently with the sale
the Charter Operating credit facilities) are restricted subsidiaries of $1.5 billion senior second-lien notes in April 2004, among
of Charter Operating under the Charter Operating notes. other things, to defer maturities and increase availability under
Unrestricted subsidiaries generally will not be subject to the these facilities and to enable Charter Operating to acquire the
restrictive covenants in the Charter Operating indenture. interests of the lenders under the CC VI Operating, CC VIII
In the event of specified change of control events, Charter Operating and Falcon credit facilities, thereby consolidating all
Operating must offer to purchase the Charter Operating notes at credit facilities under one amended and restated Charter
a purchase price equal to 101% of the total principal amount of Operating credit agreement.
the Charter Operating notes repurchased plus any accrued and
unpaid interest thereon.
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