Charter 2010 Annual Report Download - page 102

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F- F-PB
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)
e CCO Holdings notes are guaranteed by Charter. ey are
senior debt obligations of CCO Holdings and CCO Holdings
Capital Corp and rank equally with all other current and future
unsecured, unsubordinated obligations of CCO Holdings and CCO
Holdings Capital Corp. e CCO Holdings notes are structurally
subordinated to all obligations of subsidiaries of CCO Holdings,
including the Charter Operating notes and Charter Operating credit
facilities.
CCO Holdings may redeem some or all of the CCO Holdings notes
at any time at a premium. e optional redemption price declines
to 100% of the respective series’ principal amount, plus accrued and
unpaid interest, if any, on or after varying dates in 2015 through 2018.
In addition, at any time prior to April 30, 2013 in the case of the
2018 and 2020 Notes, October 30, 2013 in the case of the 2017
Notes and January 15, 2014 in the case of the 2019 Notes, CCO
Holdings may redeem up to 35% of the aggregate principal amount
of the notes at a redemption price at a premium plus accrued and
unpaid interest to the redemption date, with the net cash proceeds of
one or more equity offerings (as defined in the indenture); provided
that certain conditions are met.
In the event of specified change of control events, CCO Holdings
must offer to purchase the outstanding CCO Holdings 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
e 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. e
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 8.00% 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. e 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.
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.
High-Yield Restrictive Covenants; Limitation on Indebtedness.
e indentures governing the CCH II, CCO Holdings and Charter
Operating notes contain certain covenants that restrict the ability of
CCH II, CCH II Capital Corp., CCO Holdings, CCO Holdings
Capital Corp., Charter Operating, Charter Communications
Operating Capital Corp., and all of their restricted subsidiaries to:
incur additional debt;
pay dividends on equity or repurchase equity;
make investments;
sell all or substantially all of their assets or merge with or into
other companies;
sell assets;
enter into sale-leasebacks;
in the case of restricted subsidiaries, create or permit to exist
dividend or payment restrictions with respect to the bond
issuers, guarantee their parent companies debt, or issue specified
equity interests;
engage in certain transactions with affiliates; and
grant liens.
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