Charter 2009 Annual Report Download - page 71

CCH II, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008, AND 2007
(dollars in millions, except where indicated)
F-23
part, at 100% of the principal amount outstanding plus a “make-whole” premium calculated based on a discount rate
of the Treasury rate plus 50 basis points, plus accrued and unpaid interest. On or after the third anniversary of their
issuance, the New CCH II Notes will be subject to redemption by CCH II for cash equal to 106.75% of the principal
amount of the New CCH II Notes being redeemed for redemptions made during the fourth year following their
issuance, 103.375% for redemptions made during the fifth year following their issuance, 101.6875% for
redemptions made during the sixth year following their issuance, and 100.000% for redemptions made thereafter, in
each case, together with accrued and unpaid interest.
In the event of specified change of control events, CCH II must offer to purchase the outstanding CCH II notes from
the holders at a purchase price equal to 101% of the total principal amount of the notes, plus any accrued and unpaid
interest.
CCO Holdings Notes
The CCO Holdings notes are senior debt obligations of CCO Holdings and CCO Holdings Capital Corp. They rank
equally with all other current and future unsecured, unsubordinated obligations of CCO Holdings and CCO
Holdings Capital Corp. The CCO Holdings notes are structurally subordinated to all obligations of subsidiaries of
CCO Holdings, including the Charter Operating notes and the Charter Operating credit facilities.
The issuers of the CCO Holdings 8 ¾% senior notes may redeem all or a part of the notes at a redemption price that
declines ratably from the redemption price of 102.917% to a redemption price on or after November 15, 2011 of
100.0% of the principal amount of the CCO Holdings 8 ¾% senior notes redeemed, plus, in each case, any accrued
and unpaid interest.
In the event of specified change of control events, CCO Holdings must offer to purchase the outstanding CCO
Holdings senior notes from the holders at a purchase price equal to 101% of the total principal amount of the notes,
plus any accrued and unpaid interest.
Charter Operating Notes
The Charter Operating notes are senior debt obligations of Charter Operating and Charter Communications
Operating Capital Corp. To the extent of the value of the collateral (but subject to the prior lien of the credit
facilities), they rank effectively senior to all of Charter Operating’ s future unsecured senior indebtedness. The
collateral currently consists of the capital stock of Charter Operating held by CCO Holdings, all of the intercompany
obligations owing to CCO Holdings by Charter Operating or any subsidiary of Charter Operating, and substantially
all of Charter Operating’ s and the guarantors’ assets (other than the assets of CCO Holdings). CCO Holdings and
those subsidiaries of Charter Operating that are guarantors of, or otherwise obligors with respect to, indebtedness
under the Charter Operating credit facilities and related obligations, guarantee the Charter Operating notes.
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 an 8% senior second-lien note 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.
On or after April 30, 2009, Charter Operating may redeem all or a part of the 8 3/8% senior second lien notes at a
redemption price that declines ratably from the initial redemption price of 104.188% to a redemption price on or
after April 30, 2012 of 100% of the principal amount of the 8 3/8% senior second lien notes redeemed plus in each
case accrued and unpaid interest.
In March 2008, Charter Operating issued $546 million principal amount of 10.875% senior second-lien notes due
2014, guaranteed by CCO Holdings and certain other subsidiaries of Charter Operating, in a private transaction. Net
proceeds from the senior second-lien notes were used to reduce borrowings, but not commitments, under the
revolving portion of the Charter Operating credit facilities.