Charter 2010 Annual Report Download - page 101

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010, 2009, AND 2008
(dollars in millions, except share or per share data or where indicated)
represent the fair value of the debt as of the Effective Date, plus the
accretion to the balance sheet date. However, the amount that is
currently payable if the debt becomes immediately due is equal to the
principal amount of the debt. e Company has availability under
the revolving portion of its credit facility of approximately $1.1
billion as of December 31, 2010. As such, debt scheduled to mature
during the next 12 months is reflected as long-term as of December
31, 2010.
CCH II Notes
On the Effective Date, CCH II and CCH II Capital Corp. issued
approximately $1.8 billion in total principal amount of new 13.5%
senior notes. Such notes are guaranteed by Charter. Existing holders
of $1.5 billion principal amount of senior notes of CCH II and
CCH II Capital Corp. (“CCH II Notes”) exchanged their CCH II
Notes plus accrued interest for $1.7 billion principal amount ($2.0
billion fair value) of new 13.5% Senior Notes of CCH II and CCH
II Capital Corp. (the “New CCH II Notes”). CCH II Notes and
accrued interest that were not exchanged were paid in cash in an
amount equal to $1.1 billion.
e New CCH II Notes are senior debt obligations of CCH II and
CCH II Capital Corp. e New CCH II Notes rank equally with
all other current and future unsecured, unsubordinated obligations
of CCH II and CCH II Capital Corp. e New CCH II notes are
structurally subordinated to all obligations of the subsidiaries of
CCH II, including the CCO Holdings notes and credit facility and
the Charter Operating notes and credit facilities.
At any time prior to the third anniversary of their issuance, CCH II
will be permitted to redeem up to 35% of the New CCH II Notes
with the proceeds of an equity offering, for cash equal to 113.5%
of the then-outstanding principal amount of the New CCH II
Notes being redeemed, plus accrued and unpaid interest. At or
any time prior to the third anniversary of their issuance, CCH II
will be permitted to redeem the New CCH II Notes, in whole or
in part, at 100% of the principal amount outstanding thereof plus
accrued and unpaid interest, if any, to the redemption date, plus the
Applicable Premium. e Applicable Premium is an amount equal
to the excess of (a) the present value of the remaining interest and
principal payments due on a New CCH II Note to its final maturity
date, computed using a discount rate equal to the Treasury Rate on
such date plus 0.50%, over (y) the outstanding principal amount
of such note. On or after the third anniversary of their issuance, the
New CCH II Notes may be redeemed 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
On April 28, 2010, CCO Holdings and CCO Holdings Capital
Corp. closed on transactions in which they issued $900 million
aggregate principal amount of 7.875% Senior Notes due 2018
(the “2018 Notes”) and $700 million aggregate principal amount
of 8.125% Senior Notes due 2020 (the “2020 Notes”). e net
proceeds were used to finance the tender offers and redemptions
in which $800 million principal amount of CCO Holdings'
outstanding 8.75% Senior Notes due 2013 (the “2013 Notes”) and
$770 million principal amount of Charter Operating’s outstanding
8.375% Senior Second Lien Notes due 2014 (the “2014 Notes) were
repurchased.
In September 2010, CCO Holdings and CCO Holdings Capital
Corp. closed on transactions in which they issued $1.0 billion
aggregate principal amount of 7.25% Senior Notes due 2017
(the “2017 Notes”). e proceeds were used to repay amounts
outstanding under the Charter Operating credit facilities.
In January 2011, CCO Holdings and CCO Holdings Capital Corp.
closed on transactions in which they issued $1.4 billion aggregate
principal amount of 7.00% Senior Notes due 2019 (the “2019
Notes”). e net proceeds of the issuances of the 2019 Notes were
contributed by CCO Holdings to Charter Operating as a capital
contribution and were used to repay indebtedness under the Charter
Operating credit facilities. e Company expects to record a loss
on extinguishment of debt of approximately $67 million in the first
quarter of 2011 related to these transactions.