Charter 2007 Annual Report Download - page 58

CCO Holdings Credit Facility
In March 2007, CCO Holdings entered into a credit agreement
(the “CCO Holdings credit facility”) which consists of a $350 mil-
lion term loan facility. The facility matures in September 2014.
The CCO Holdings credit facility also allows us to enter into
incremental term loans in the future, maturing on the dates set
forth in the notices establishing such term loans, but no earlier
than the maturity date of the existing term loans. However, no
assurance can be given that we could obtain such incremental
term loans if CCO Holdings sought to do so. Borrowings under
the CCO Holdings credit facility bear interest at a variable
interest rate based on either LIBOR or a base rate plus, in either
case, an applicable margin. The applicable margin for LIBOR
term loans, other than incremental loans, is 2.50% above LIBOR.
The applicable margin with respect to incremental loans is to be
agreed upon by CCO Holdings and the lenders when the
incremental loans are established. The CCO Holdings credit
facility is secured by the equity interests of Charter Operating,
and all proceeds thereof.
Credit Facilities – Restrictive Covenants
Charter Operating Credit Facilities
The Charter Operating credit facilities contain representations
and warranties, and affirmative and negative covenants custom-
ary for financings of this type. The financial covenants measure
performance against standards set for leverage to be tested as of
the end of each quarter. Additionally, the Charter Operating
credit facilities contain provisions requiring mandatory loan pre-
payments under specific circumstances, including in connection
with certain sales of assets, so long as the proceeds have not
been reinvested in the business.
The Charter Operating credit facilities permit Charter Oper-
ating and its subsidiaries to make distributions to pay interest on
the Charter convertible notes, the CCHC notes, the Charter
Holdings notes, the CIH notes, the CCH I notes, the CCH II
notes, the CCO Holdings notes, the CCO Holdings credit
facility, and the Charter Operating second-lien notes, provided
that, among other things, no default has occurred and is continu-
ing under the credit facilities. Conditions to future borrowings
include absence of a default or an event of default under the
credit facilities, and the continued accuracy in all material
respects of the representations and warranties, including the
absence since December 31, 2005 of any event, development, or
circumstance that has had or could reasonably be expected to
have a material adverse effect on our business.
The events of default under the Charter Operating credit
facilities include among other things:
kthe failure to make payments when due or within the
applicable grace period,
kthe failure to comply with specified covenants, including,
but not limited to, a covenant to annually deliver audited
financial statements with an unqualified opinion from our
independent accountants,
kthe failure to pay or the occurrence of events that cause or
permit the acceleration of other indebtedness owing by
CCO Holdings, Charter Operating, or Charter Operating’s
subsidiaries in amounts in excess of $100 million in aggre-
gate principal amount,
kthe failure to pay or the occurrence of events that result in
the acceleration of other indebtedness owing by certain of
CCO Holdings’ direct and indirect parent companies in
amounts in excess of $200 million in aggregate principal
amount,
kPaul Allen and/or certain of his family members and/or
their exclusively owned entities (collectively, the “Paul Allen
Group”) ceasing to have the power, directly or indirectly, to
vote at least 35% of the ordinary voting power of Charter
Operating,
kthe consummation of any transaction resulting in any person
or group (other than the Paul Allen Group) having power,
directly or indirectly, to vote more than 35% of the ordinary
voting power of Charter Operating, unless the Paul Allen
Group holds a greater share of ordinary voting power of
Charter Operating, and
kCharter Operating ceasing to be a wholly-owned direct
subsidiary of CCO Holdings, except in certain very limited
circumstances.
CCO Holdings Credit Facility
The CCO Holdings credit facility contains covenants that are
substantially similar to the restrictive covenants for the CCO
Holdings notes except that the leverage ratio is 5.50 to 1.0. See
“– Summary of Restricted Covenants of Our High Yield Notes.”
The CCO Holdings credit facility contains provisions requiring
mandatory loan prepayments under specific circumstances,
including in connection with certain sales of assets, so long as
the proceeds have not been reinvested in the business. The CCO
Holdings credit facility permits CCO Holdings and its subsidiar-
ies to make distributions to pay interest on the CCI convertible
senior notes, the CCHC notes, the Charter Holdings notes, the
CIH notes, the CCH I notes, the CCH II notes, the CCO
Holdings notes, and the Charter Operating second-lien notes,
provided that, among other things, no default has occurred and
is continuing under the CCO Holdings credit facility.
OUTSTANDING NOTES
Charter Communications, Inc. 5.875% Convertible Senior Notes due 2009
Charter has issued and outstanding 5.875% convertible senior
notes due 2009 with a total principal amount of $49 million. The
5.875% convertible senior notes are unsecured (except with
respect to the collateral as described below) and rank equally
with our existing and future unsubordinated and unsecured
indebtedness (except with respect to the collateral described
below), but are structurally subordinated to all existing and future
indebtedness and other liabilities of our subsidiaries. Interest is
payable semi-annually in arrears.
CHARTER COMMUNICATIONS, INC. 2007 FORM 10-K
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