Charter 2005 Annual Report Download - page 72

CHARTER COMMUNICATIONS, INC. 2005 FORM 10-K
equally with all other current or future unsubordinated obliga-
CCO Holdings, LLC Notes tions of CCO Holdings and CCO Holdings Capital Corp. The
83
/4% Senior Notes due 2013 CCO Holdings notes are structurally subordinated to all
obligations of subsidiaries of CCO Holdings, including the
In November 2003 and August 2005, CCO Holdings and CCO Renaissance notes, the Charter Operating notes and the Charter
Holdings Capital Corp. jointly issued $500 million and $300 mil- Operating credit facilities.
lion, respectively, total principal amount of 83
/4% senior notes In the event of specified change of control events, CCO
due 2013. Holdings must offer to purchase the outstanding CCO Holdings
Interest on the CCO Holdings senior notes accrues at senior notes from the holders at a purchase price equal to 101%
83
/4% per year and is payable semi-annually in arrears on each of the total principal amount of the notes, plus any accrued and
May 15 and November 15. unpaid interest.
At any time prior to November 15, 2006, the issuers of the The indenture governing the CCO Holdings senior notes
CCO Holdings senior notes may redeem up to 35% of the total contains restrictive covenants that limit certain transactions or
principal amount of the CCO Holdings senior notes to the activities by CCO Holdings and its restricted subsidiaries,
extent of public equity proceeds they have received on a pro including the covenants summarized below. Substantially all of
rata basis at a redemption price equal to 108.75% of the CCO Holdings’ direct and indirect subsidiaries are currently
principal amount of CCO Holdings senior notes redeemed, plus restricted subsidiaries.
any accrued and unpaid interest. The covenant in the indenture governing the CCO Hold-
On or after November 15, 2008, the issuers of the CCO ings senior notes that restricts incurrence of debt and issuance of
Holdings senior notes may redeem all or a part of the notes at a preferred stock permits CCO Holdings and its subsidiaries to
redemption price that declines ratably from the initial redemp- incur or issue specified amounts of debt or preferred stock, if,
tion price of 104.375% to a redemption price on or after after giving pro forma effect to the incurrence or issuance, CCO
November 15, 2011 of 100.0% of the principal amount of the Holdings could meet a leverage ratio (ratio of consolidated debt
CCO Holdings senior notes redeemed, plus, in each case, any to four times EBITDA, as defined, from the most recent fiscal
accrued and unpaid interest. quarter for which internal financial reports are available) of 4.5
Senior Floating Rate Notes Due 2010 to 1.0.
In addition, regardless of whether the leverage ratio could
In December 2004, CCO Holdings and CCO Holdings Capital be met, so long as no default exists or would result from the
Corp. jointly issued $550 million total principal amount of senior incurrence or issuance, CCO Holdings and its restricted subsidi-
floating rate notes due 2010. aries are permitted to incur or issue:
The CCO Holdings senior floating rate notes have an
(up to $9.75 billion of debt under credit facilities, including
annual interest rate of LIBOR plus 4.125%, which resets and is
debt under credit facilities outstanding on the issue date of
payable quarterly in arrears on each March 15, June 15,
the CCO Holdings senior notes,
September 15 and December 15.
At any time prior to December 15, 2006, CCO Holdings (up to $75 million of debt incurred to finance the purchase
and CCO Holdings Capital Corp. may redeem up to 35% of the or capital lease of new assets,
notes in an amount not to exceed the amount of proceeds of
(up to $300 million of additional debt for any purpose, and
one or more public equity offerings at a redemption price equal
to 100% of the principal amount, plus a premium equal to the (other items of indebtedness for specific purposes such as
interest rate per annum applicable to the notes on the date intercompany debt, refinancing of existing debt, and interest
notice of redemption is given, plus accrued and unpaid interest, rate swaps to provide protection against fluctuation in
if any, to the redemption date, provided that at least 65% of the interest rates.
original aggregate principal amount of the notes issued remains The restricted subsidiaries of CCO Holdings are generally
outstanding after the redemption. not permitted to issue debt securities contractually subordinated
CCO Holdings and CCO Holdings Capital Corp. may to other debt of the issuing subsidiary or preferred stock, in
redeem 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-
Additional terms of the CCO Holdings Senior Notes and Senior ture, so our subsidiaries that are subject to credit facilities are
Floating Rate Notes not permitted to utilize the full debt incurrence that would
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
62