Charter 2011 Annual Report Download - page 103

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011, 2010 AND 2009
(dollars in millions, except share or per share data or where indicated)
F- 19
High-Yield Restrictive Covenants; Limitation on Indebtedness.
The indentures governing the CCH II and CCO Holdings notes contain certain covenants that restrict the ability of CCH II, CCH
II Capital Corp., CCO Holdings, CCO Holdings 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.
Pursuant to consent solicitations completed January 25, 2012, the restrictive covenants previously contained in Charter Operating's
notes have been removed.
CCO Holdings Credit Facility
CCO Holdings' credit agreement consists of a $350 million term loan facility (the “CCO Holdings credit facility”). The facility
matures in September 2014. Borrowings under the CCO Holdings credit facility bear interest at a variable interest rate based on
either LIBOR (0.30% as of December 31, 2011) or a base rate plus, in either case, an applicable margin. The applicable margin
for LIBOR term loans is 2.50% above LIBOR. If an event of default were to occur, CCO Holdings would not be able to elect
LIBOR and would have to pay interest at the base rate plus the applicable margin. The CCO Holdings credit facility is secured
by the equity interests of Charter Operating, and all proceeds thereof.
Charter Operating Credit Facilities
In March 2010, Charter Operating entered into an amended and restated credit agreement. The refinancing resulted in a loss on
extinguishment of debt of approximately $1 million for the year ended December 31, 2010 (Successor).
In 2010, the Company prepaid $388 million principal amount of term B-1 and B-2 loans under the Charter Operating credit facilities
resulting in a loss on extinguishment of debt of approximately $16 million for the year ended December 31, 2010 (Successor).
In December 2011, the Company entered into a senior secured term loan A facility pursuant to the terms of the Charter Operating
credit agreement providing for $750 million of term loans with a final maturity date of May 15, 2017 and no LIBOR floor. The
term loan A facility will have a delayed draw component: $250 million was funded on closing of the term loan A and the remaining
$500 million will be funded no later than March 15, 2012. The proceeds were used along with proceeds of the CCO Holdings
2020 Notes to finance the repurchase of certain Charter Operating's 8.00% and 10.875% senior second-lien notes and certain of
CCH II's 13.50% senior notes discussed above.
The Charter Operating credit facilities have an outstanding principal amount of $3.9 billion at December 31, 2011 as follows:
• A term A loan with an aggregate principal amount of $750 million, of which approximately $250 million was outstanding
as of December 31, 2011, which is repayable in equal quarterly installments and aggregating $13 million in 2013 and
2014 and $25 million in 2015 and 2016, with the remaining balance due at final maturity on May 15, 2017 (the unused
portion of the Term Loan A was available in a single drawing through March 15, 2012 and was drawn in February
2012);
• A term B-1 loan with a remaining principal amount of approximately $78 million, which is repayable in equal quarterly
installments and aggregating $0.8 million in each loan year, with the remaining balance due at final maturity on March
6, 2014;
• A term B-2 loan with a remaining principal amount of approximately $10 million, which is repayable in equal quarterly
installments and aggregating $0.1 million in each loan year, with the remaining balance due at final maturity on March
6, 2014;