Charter 2005 Annual Report Download - page 68

CHARTER COMMUNICATIONS, INC. 2005 FORM 10-K
are materially more restrictive than those governing their debt, Note Series Redemption Dates Percentage of Principal
lien, asset sale, lease and similar agreements existing when they
13.5% September 30, 2007 — January 14, 2008 104.5%
entered into the indentures, unless those restrictions are on January 15, 2008 — January 14, 2009 102.25%
customary terms that will not materially impair Charter Hold- Thereafter 100.0%
ings’ ability to repay the high-yield notes. 12.125% September 30, 2007 — January 14, 2008 106.063%
January 15, 2008 — January 14, 2009 104.042%
The restricted subsidiaries of Charter Holdings are generally
January 15, 2009 — January 14, 2010 102.021%
not permitted to guarantee or pledge assets to secure debt of Thereafter 100.0%
Charter Holdings, unless the guaranteeing subsidiary issues a
guarantee of the notes of comparable priority and tenor, and In the event that a specified change of control event
waives any rights of reimbursement, indemnity or subrogation happens, CIH and CCH I Holdings Capital Corp. must offer to
arising from the guarantee transaction for at least one year. repurchase any outstanding notes at a price equal to the sum of
The indentures also restrict the ability of Charter Holdings the accreted value of the notes plus accrued and unpaid interest
and its restricted subsidiaries to enter into certain transactions plus a premium that varies over time.
with affiliates involving consideration in excess of $15 million The indenture governing the CIH notes contains restrictive
without a determination by the board of directors of Charter covenants similar to those contained in the indenture governing
Holdings that the transaction is on terms no less favorable than the Charter Holdings notes with the following exceptions:
arms length, or transactions with affiliates involving over
(The debt incurrence covenant permits up to $9.75 billion
$50 million without receiving an independent opinion as to the (rather than $3.5 billion) of debt under credit facilities (less
fairness of the transaction addressed to the holders of the the amount of net proceeds of asset sales applied to repay
Charter Holdings notes. such debt as required by the asset sale covenant).
CCH I Holdings, LLC Notes
(CIH and its restricted subsidiaries are generally permitted
In September 2005, CIH and CCH I Holdings Capital Corp. to pay dividends on equity interests, repurchase interests, or
jointly issued $2.5 billion total principal amount of 9.92% to make other specified restricted payments only if, after
13.50% senior accreting notes due 2014 and 2015 in exchange giving pro forma effect to the transaction, the CIH
for an aggregate amount of $2.4 billion of Charter Holdings Leverage Ratio would be below 8.75 to 1.0 and if no
notes due 2011 and 2012, spread over six series of notes and default exists or would exist as a consequence of such
with varying interest rates as set forth in the table above under transaction. If those conditions are met, restricted payments
‘‘Description of Our Outstanding Debt.’’ The notes are guaran- are permitted in a total amount of up to the sum of (1) the
teed by Charter Holdings. greater of (a) $500 million or (b) 100% of CIH’s consoli-
The CIH notes are senior debt obligations of CIH and dated EBITDA, as defined, minus 1.2 times its consolidated
CCH I Holdings Capital Corp. They rank equally with all other interest expense each for the period from September 28,
current and future unsecured, unsubordinated obligations of CIH 2005 to the end of CIH’s most recently ended full fiscal
and CCH I Holdings Capital Corp. The CIH notes are quarter for which internal financial statements are available,
structurally subordinated to all obligations of subsidiaries of CIH, plus (2) 100% of new cash and non-cash equity proceeds
including the CCH I notes, the CCH II notes, the CCO received by CIH and not allocated to the debt incurrence
Holdings notes, the Renaissance notes, the Charter Operating covenant or to permitted investments, all cumulatively from
notes and the Charter Operating credit facilities. September 28, 2005.
The CIH notes may not be redeemed at the option of the
issuers until September 30, 2007. On or after such date, the CIH (Instead of the $150 million and $50 million permitted
notes may be redeemed in accordance with the following table. investment baskets described above, there is a $750 million
permitted investment basket.
Note Series Redemption Dates Percentage of Principal
CCH I, LLC Notes
11.125% September 30, 2007 — January 14, 2008 103.708% In September 2005, CCH I and CCH I Capital Corp. jointly
January 15, 2008 — January 14, 2009 101.854%
Thereafter 100.0% issued $3.5 billion total principal amount of 11% senior secured
9.92% September 30, 2007 — Thereafter 100.0% notes due October 2015 in exchange for an aggregate amount of
10.0% September 30, 2007 — May 14, 2008 103.333% $4.2 billion of certain Charter Holdings notes. The notes are
May 15, 2008 — May 14, 2009 101.667%
Thereafter 100.0% guaranteed by Charter Holdings and are secured by a pledge of
11.75% September 30, 2007 — May 14, 2008 103.917% 100% of the equity interest of CCH I’s wholly owned direct
May 15, 2008 — May 14, 2009 101.958% subsidiary, CCH II. Such pledge is subject to significant
Thereafter 100.0% limitations as described in the related pledge agreement. Interest
on the CCH I notes accrues at 11% per annum and is payable
semi-annually in arrears on each April 1 and October 1,
commencing on April 1, 2006.
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