Charter 2012 Annual Report Download - page 63

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51
Charter Operating Credit Facilities
The Charter Operating credit facilities contain representations and warranties, and affirmative and negative covenants customary
for financings of this type. The financial covenants measure performance against standards set for leverage to be tested as of the
end of each quarter. 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.
Additionally, the Charter Operating credit facilities provisions contain an allowance for restricted payments so long as the
consolidated leverage ratio is no greater than 3.5 after giving pro forma effect to such restricted payment. The 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.
The 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;
• 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;
and
• similar to provisions contained in the CCO Holdings notes and credit facility, the consummation of any change of control
transaction resulting in any person or group having power, directly or indirectly, to vote more than 50% of the ordinary
voting power for the management of Charter Operating on a fully diluted basis and the occurrence of a ratings event
including a downgrade in the corporate family rating during a ratings decline period.
CCO Holdings Notes
The CCO Holdings notes are senior debt obligations of CCO Holdings and CCO Holdings Capital Corp. Such notes are guaranteed
by Charter. They rank equally with all other current and future unsecured, unsubordinated obligations of CCO Holdings and CCO
Holdings Capital Corp. They are structurally subordinated to all obligations of subsidiaries of CCO Holdings, including the Charter
Operating credit facilities.