Charter 2006 Annual Report Download - page 66

CHARTER COMMUNICATIONS, INC. 2006 FORM 10-K
Note Series Redemption Dates Percentage of Principal
83 /8% senior second-lien notes due 2014 April 30, 2009 — April 29, 2010 104.188%
April 30, 2010 — April 29, 2011 102.792%
April 30, 2011 — April 29, 2012 101.396%
Thereafter 100.000%
* CCH I may, prior to October 1, 2008 in the event of a qualified equity offering providing sufficient proceeds, redeem up to 35% of the aggregate principal amount of
the CCH I notes at a redemption price of 111% of the principal amount plus accrued and unpaid interest.
** CCH II may, prior to October 1, 2009 in the event of a qualified equity offering providing sufficient proceeds, redeem up to 35% of the aggregate principal amount of
the CCH II notes at a redemption price of 110.25% of the principal amount plus accrued and unpaid interest.
*** Charter Operating may, prior to April 30, 2007 in the event of a qualified equity offering providing sufficient proceeds, redeem up to 35% of the aggregate principal
amount of the Charter Operating notes at a redemption price of 108.375% with respect to the 83
/8% senior second-lien notes due 2014 Notes and a redemption price of
108% with respect to the 8% senior second-lien notes due 2012.
**** Charter Operating may, at any time and from time to time, at their option, redeem the outstanding 8% second lien notes due 2012, in whole or in part, at a redemption
price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the redemption date, plus the Make-Whole Premium. The Make-Whole
Premium is an amount equal to the excess of (a) the present value of the remaining interest and principal payments due on a 8% senior second-lien notes due 2012 to
its final maturity date, computed using a discount rate equal to the Treasury Rate on such date plus 0.50%, over (b) the outstanding principal amount of such Note.
In the event that a specified change of control event occurs, Restrictions on Additional Debt
each of the respective issuers of the notes must offer to The limitations on incurrence of debt and issuance of preferred
repurchase any then outstanding notes at 101% of their principal stock contained in various indentures permit each of the
amount or accrued value, as applicable, plus accrued and unpaid respective notes issuers and its restricted subsidiaries to incur
interest, if any. additional debt or issue preferred stock, so long as, after giving
pro forma effect to the incurrence, the leverage ratio would be
SUMMARY OF RESTRICTIVE COVENANTS OF OUR HIGH YIELD NOTES below a specified level for each of the note issuers as follows:
The following description is a summary of certain restrictions of Issuer Leverage Ratio
our Debt Agreements. The summary does not restate the terms
Charter Holdings 8.75 to 1
of the Debt Agreements in their entirety, nor does it describe all CIH 8.75 to 1
restrictions of the Debt Agreements. The agreements and CCH I 7.5 to 1
instruments governing each of the Debt Agreements are CCH II 5.5 to 1
complicated and you should consult such agreements and CCOH 4.5 to 1
instruments for more detailed information regarding the Debt CCO 4.25 to 1
Agreements. In addition, regardless of whether the leverage ratio could
The notes issued by Charter Holdings, CIH, CCH I, be met, so long as no default exists or would result from the
CCH II, CCO Holdings and Charter Operating (together, the incurrence or issuance, each issuer and their restricted subsidiar-
‘‘note issuers’’) were issued pursuant to indentures that contain ies are permitted to issue among other permitted indebtedness:
covenants that restrict the ability of the note issuers and their
(up to an amount of debt under credit facilities not
subsidiaries to, among other things: otherwise allocated as indicated below:
(incur indebtedness;
(Charter Holdings: $3.5 billion
(pay dividends or make distributions in respect of capital
(CIH, CCH I, CCH II and CCO Holdings: $9.75 billion
stock and other restricted payments;
(Charter Operating: $6.8 billion
(issue equity;
(up to $75 million of debt incurred to finance the purchase
(make investments; or capital lease of new assets;
(create liens;
(up to $300 million of additional debt for any purpose;
(sell assets;
(Charter Holdings and CIH may incur additional debt in an
(consolidate, merge, or sell all or substantially all assets; amount equal to 200% of proceeds of new cash equity
proceeds received since March 1999, the date of our first
(enter into sale leaseback transactions;
indenture, and not allocated for restricted payments or
(create restrictions on the ability of restricted subsidiaries to permitted investments (the ‘‘Equity Proceeds Basket’’); and
make certain payments; or
(other items of indebtedness for specific purposes such as
(enter into transactions with affiliates. intercompany debt, refinancing of existing debt, and interest
However, such covenants are subject to a number of rate swaps to provide protection against fluctuation in
important qualifications and exceptions. Below we set forth a interest rates.
brief summary of certain of the restrictive covenants.
52