Charter 2011 Annual Report Download - page 70

58
On February 14, 2012, Charter Operating provided a notice of redemption to redeem all of the remaining 10.875% senior notes
due 2014.
Summary of Restrictive Covenants of Our Notes
The following description is a summary of certain restrictions of our Debt Agreements. The summary does not restate the terms
of the Debt Agreements in their entirety, nor does it describe all restrictions of the Debt Agreements. The agreements and instruments
governing each of the Debt Agreements are complicated and you should consult such agreements and instruments for more detailed
information regarding the Debt Agreements. Pursuant to consent solicitations completed January 25, 2012, the restrictive covenants
previously contained in Charter Operating's notes have been removed.
The notes issued by CCH II and CCO Holdings (together, the “note issuers”) were issued pursuant to indentures that contain
covenants that restrict the ability of the note issuers and their subsidiaries to, among other things:
• incur indebtedness;
• pay dividends or make distributions in respect of capital stock and other restricted payments;
• issue equity;
• make investments;
• create liens;
• sell assets;
• consolidate, merge, or sell all or substantially all assets;
• enter into sale leaseback transactions;
• create restrictions on the ability of restricted subsidiaries to make certain payments; or
• enter into transactions with affiliates.
However, such covenants are subject to a number of important qualifications and exceptions. Below we set forth a brief summary
of certain of the restrictive covenants.
Restrictions on Additional Debt
The limitations on incurrence of debt and issuance of preferred stock contained in various indentures permit each of the respective
notes issuers and its restricted subsidiaries to incur additional debt or issue preferred stock, so long as, after giving pro forma effect
to the incurrence, the leverage ratio would be below a specified level for each of the note issuers. The leverage ratios under our
notes for CCH II and CCO Holdings are as follows:
Issuer
CCH II
CCO Holdings
Leverage Ratio
5.75 to 1
6.0 to 1
In addition, regardless of whether the leverage ratio could be met, so long as no default exists or would result from the incurrence
or issuance, each issuer and their restricted subsidiaries are permitted to issue among other permitted indebtedness:
• up to an amount of debt under credit facilities not otherwise allocated as indicated below:
• CCH II: $1 billion
• CCO Holdings: $1.5 billion
• up to $75 million of debt incurred to finance the purchase or capital lease of new assets;
• up to $300 million of additional debt for any purpose (in the case of CCO Holdings notes, the limit is the greater of $300
million and 5% of consolidated net tangible assets); and
• other items of indebtedness for specific purposes such as intercompany debt, refinancing of existing debt, and interest
rate swaps to provide protection against fluctuation in interest rates.
Indebtedness under a single facility or agreement may be incurred in part under one of the categories listed above and in part under
another, and generally may also later be reclassified into another category including as debt incurred under the leverage ratio.
Accordingly, indebtedness under our credit facilities is incurred under a combination of the categories of permitted indebtedness
listed above. The restricted subsidiaries of note issuers are generally not permitted to issue subordinated debt securities.