Charter 2010 Annual Report Download - page 68

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less than the yield for the other certain term loans. Charter Operating
pays interest equal to LIBOR plus 3.0% on amounts borrowed under
the revolving credit facility and pays a revolving commitment fee of
.5% per annum on the daily average available amount of the revolving
commitment, payable quarterly.
e Charter Operating credit facilities also allow us to enter into
incremental term loans in the future with an aggregate, together with
all other then outstanding first lien indebtedness, including any first
lien notes, of no more than $7.5 billion (less any principal payments
of term loan indebtedness and first lien notes as a result of any sale
of assets), with amortization as set forth in the notices establishing
such term loans, but with no amortization greater than 1% per year
prior to the final maturity of the existing term loans. Although
the Charter Operating credit facilities allow for the incurrence of a
certain amount of incremental term loans, no assurance can be given
that the Company could obtain additional incremental term loans in
the future if Charter Operating sought to do so or what amount of
incremental term loans would be allowable at any given time under
the terms of the Charter Operating credit facilities.
e obligations of Charter Operating under the Charter Operating
credit facilities (the “Obligations”) are guaranteed by Charter Operating’s
immediate parent company, CCO Holdings, and subsidiaries of Charter
Operating, except for certain subsidiaries, including immaterial
subsidiaries and subsidiaries precluded from guaranteeing by reason
of the provisions of other indebtedness to which they are subject (the
“non-guarantor subsidiaries”). e Obligations are also secured by
(i) a lien on substantially all of the assets of Charter Operating and its
subsidiaries (other than assets of the non-guarantor subsidiaries), to
the extent such lien can be perfected under the Uniform Commercial
Code by the filing of a financing statement, and (ii) a pledge by CCO
Holdings of the equity interests owned by it in Charter Operating
or any of Charter Operating’s subsidiaries, as well as intercompany
obligations owing to it by any of such entities.
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CCO Holdings Credit Facility
e 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 and
the change of control definition provides that a change of control
occurs if a holder becomes the beneficial owner of 35% of more
of Charter’s voting stock unless Paul G. Allen beneficially owns a
greater percentage. See “—Summary of Restricted Covenants of
Our Notes.” e 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. e CCO
Holdings credit facility permits CCO Holdings and its subsidiaries
to make distributions to pay interest on the CCH II notes, the
CCO Holdings notes, the Charter Operating credit facilities 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.
Charter Operating Credit Facilities
e Charter Operating credit facilities contain representations and
warranties, and affirmative and negative covenants customary for
financings of this type. e 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 prepayments under specific
circumstances, including in connection with certain sales of assets, so
long as the proceeds have not been reinvested in the business. e
Charter Operating credit facilities permit Charter Operating and its
subsidiaries to make distributions to pay interest on the currently
outstanding subordinated and parent company indebtedness,
provided that, among other things, no default has occurred and is
continuing under the Charter Operating credit facilities.
e events of default under the Charter Operating credit facilities
include, among other things:
the failure to make payments when due or within the applicable
grace period;
the failure to comply with specified covenants, including, but
not limited to, a covenant to deliver audited financial statements
for Charter Operating with an unqualified opinion from our
independent accountants and without a “going concern” or like
qualification or exception;
the 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 aggregate principal amounts in excess of $100
million;
the failure to pay or the occurrence of events that result in the
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