Charter 2009 Annual Report Download - page 44

41
In the event that a specified change of control event occurs, each of the respective issuers of the notes must offer to
repurchase any then outstanding notes at 101% of their principal amount or accrued value, as applicable, plus
accrued and unpaid interest, if any.
Summary of Restrictive Covenants of Our Notes
The following description is a summary of certain restrictions of our Debt Agreements that remain outstanding
following the effectiveness of the Plan. The summary does not restate the terms of the Debt Agreements in their
entirety, nor does it describe all restrictions of the Debt Agreements. The agreements and instruments governing
each of the Debt Agreements are complicated and you should consult such agreements and instruments for more
detailed information regarding the Debt Agreements.
The notes issued by certain of our subsidiaries (together, the “note issuers”) were issued pursuant to indentures that
contain covenants that restrict the ability of the note issuers and their subsidiaries to, among other things:
• incur indebtedness;
• pay dividends or make distributions in respect of capital stock and other restricted payments;
• issue equity;
• make investments;
• create liens;
• sell assets;
• consolidate, merge, or sell all or substantially all assets;
• enter into sale leaseback transactions;
• create restrictions on the ability of restricted subsidiaries to make certain payments; or
• enter into transactions with affiliates.
However, such covenants are subject to a number of important qualifications and exceptions. Below we set forth a
brief summary of certain of the restrictive covenants.
Restrictions on Additional Debt
The limitations on incurrence of debt and issuance of preferred stock contained in various indentures permit each of
the respective notes issuers and its restricted subsidiaries to incur additional debt or issue preferred stock, so long as,
after giving pro forma effect to the incurrence, the leverage ratio would be below a specified level for each of the
note issuers. The leverage ratios for CCH II, CCO Holdings and Charter Operating are as follows:
Issuer Leverage Ratio
CCH II 5.75 to 1
CCO Holdings 4.5 to 1
Charter Operating 4.25 to 1
In addition, regardless of whether the leverage ratio could be met, so long as no default exists or would result from
the incurrence or issuance, each issuer and their restricted subsidiaries are permitted to issue among other permitted
indebtedness:
• up to an amount of debt under credit facilities not otherwise allocated as indicated below:
• CCH II: $1 billion
• CCO Holdings: $9.75 billion
• Charter Operating: $6.8 billion
• up to $75 million of debt incurred to finance the purchase or capital lease of new assets;
• up to $300 million of additional debt for any purpose; and
• other items of indebtedness for specific purposes such as intercompany debt, refinancing of existing debt,
and interest rate swaps to provide protection against fluctuation in interest rates.
Indebtedness under a single facility or agreement may be incurred in part under one of the categories listed above
and in part under another, and generally may also later be reclassified into another category including as debt
incurred under the leverage ratio. Accordingly, indebtedness under our credit facilities is incurred under a