Charter 2012 Annual Report Download - page 62

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either LIBOR 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
The Charter Operating credit facilities have an outstanding principal amount of $3.3 billion at December 31, 2012 as follows:
• A term A loan with a remaining principal amount of $750 million, which is repayable in equal quarterly installments
and aggregating $38 million in 2013 and 2014 and $75 million in 2015 and 2016, with the remaining balance due at
final maturity on May 15, 2017;
• A term C loan with a remaining principal amount of approximately $1.5 billion, which is repayable in equal quarterly
installments and aggregating $16 million in each loan year, with the remaining balance due at final maturity on September
6, 2016;
• A term D loan with a remaining principal amount of approximately $744 million, which is repayable in equal quarterly
installments and aggregating $8 million in each loan year, with the remaining balance due at final maturity on May
15, 2019;
• A non-revolving loan with a remaining principal amount of approximately $199 million repayable in full on March 6,
2013; and
• A revolving loan with an outstanding principal amount of approximately $123 million, allowing for borrowings of up
to $1.15 billion, maturing on April 11, 2017.
Amounts outstanding under the Charter Operating credit facilities bear interest, at Charter Operating’s election, at a base rate or
LIBOR, as defined, plus a margin. The applicable LIBOR margin for the term A loan is currently 2.25%, and for the non-revolving
loan is currently 1.75%. The applicable margin for the term C loan is currently 3.25% in the case of LIBOR loans. The term D
loan bears interest at LIBOR plus 3.0%, with a LIBOR floor of 1.0%. Charter Operating pays interest equal to LIBOR plus 2.25%
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.
The 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 we 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.
The 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. The Obligations are also secured
by (i) a lien on substantially all of the assets of Charter Operating and its 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.
Credit Facilities — Restrictive Covenants
CCO Holdings Credit Facility
The 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. See “—Summary of Restricted Covenants of Our Notes.” The 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. The CCO Holdings credit facility
permits CCO Holdings and its subsidiaries to make distributions to pay interest on the CCO Holdings notes and the Charter
Operating credit facilities provided that, among other things, no default has occurred and is continuing under the CCO Holdings
credit facility.