Charter 2006 Annual Report Download - page 103

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 2006 FORM 10-K
Notes to Consolidated Financial Statements (continued)
Charter Operating Credit Facilities ary for financings of this type. The financial covenants measure
The Charter Operating credit facilities provide borrowing performance against standards set for leverage and interest
availability of up to $6.85 billion as follows: coverage, to be tested as of the end of each quarter. Addition-
ally, the Charter Operating credit facilities contain provisions
(term facility with a total principal amount of $5.0 billion, requiring mandatory loan prepayments under specific circum-
repayable in 23 equal quarterly installments, commencing stances, including in connection with certain sales of assets, so
September 30, 2007 and aggregating in each loan year to long as the proceeds have not been reinvested in the business.
1% of the original amount of the term facility, with the The Charter Operating credit facilities permit Charter
remaining balance due at final maturity in 2013; Operating and its subsidiaries to make distributions to pay
(a revolving credit facility of $1.5 billion, with a maturity interest on the Charter convertible notes, the CCHC note, the
date in 2010; and Charter Holdings notes, the CIH notes, the CCH I notes, the
CCH II notes, the CCO Holdings notes, the CCHC note and
(a revolving credit facility (the ‘‘R/T Facility’’) of $350.0 mil- the Charter Operating senior second-lien notes provided that,
lion, that converts to term loans no later than April 2007, among other things, no default has occurred and is continuing
repayable on the same terms as the term facility described under the Charter Operating credit facilities. Conditions to
above. future borrowings include absence of a default or an event of
Amounts outstanding under the Charter Operating credit default under the Charter Operating credit facilities, and the
facilities bear interest, at Charter Operating’s election, at a base continued accuracy in all material respects of the representations
rate or the Eurodollar rate (5.36% to 5.38% as of December 31, and warranties.
2006 and 4.06% to 4.50% as of December 31, 2005), as defined, The events of default under the Charter Operating credit
plus a margin. The margin prior to the amendment of the facilities include, among other things:
facility in April 2006 for Eurodollar loans was up to 3.00% for
(the failure to make payments when due or within the
the Term A facility and revolving credit facility, and up to 3.25% applicable grace period,
for the Term B facility, and for base rate loans of up to 2.00%
for the Term A facility and revolving credit facility, and up to (the failure to comply with specified covenants, including
2.25% for the Term B facility. The margin on Eurodollar rate but not limited to a covenant to deliver audited financial
term loans after the amendment of the credit facilities in April statements with an unqualified opinion from our indepen-
2006 is 2.625% and on base rate term loans is 1.625%. The dent auditors,
margin on revolving credit facility Eurodollar rate loans is 3.00% (the failure to pay or the occurrence of events that result in
and 2.00% on base rate loans. A quarterly commitment fee of up the acceleration of other indebtedness owing by certain of
to .75% is payable on the average daily unborrowed balance of CCO Holdings’ direct and indirect parent companies in
the revolving credit facility and, until converted into term loans, amounts in excess of $200 million in aggregate principal
the R/T facility. amount,
The obligations of Charter Operating under the Charter
(certain of Charter Operating’s indirect or direct parent
Operating credit facilities (the ‘‘Obligations’’) are guaranteed by
companies and Charter Operating and its subsidiaries
Charter Operating’s immediate parent company, CCO Holdings,
having indebtedness in excess of $500 million aggregate
and the subsidiaries of Charter Operating, except for certain
principal amount which remains undefeased three months
subsidiaries (the ‘‘non-guarantor subsidiaries’’). The Obligations
prior to the final maturity of such indebtedness, and
are also secured by (i) a lien on all of the assets of Charter
Operating and its subsidiaries (other than assets of the non- (certain changes in control.
guarantor subsidiaries), and (ii) a pledge by CCO Holdings of
Based upon outstanding indebtedness as of December 31,
the equity interests owned by it in Charter Operating, as well as
2006, the amortization of term loans, scheduled reductions in
intercompany obligations owing to it by Charter Operating.
available borrowings of the revolving credit facilities, and the
As of December 31, 2006, outstanding borrowings under
maturity dates for all senior and subordinated notes and
the Charter Operating credit facilities were approximately
debentures, total future principal payments on the total borrow-
$5.4 billion and the unused total potential availability was
approximately $1.3 billion, although the actual availability at that
time was only $1.1 billion because of limits imposed by
covenant restrictions.
Charter Operating Credit Facilities — Restrictive Covenants
The Charter Operating credit facilities contain representations
and warranties, and affirmative and negative covenants custom-
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