Charter 2012 Annual Report Download - page 93

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2012, 2011 AND 2010
(dollars in millions, except share or per share data or where indicated)
F- 18
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 (0.21% as of December 31, 2012) 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.
In April 2012, CCO Holdings entered into an amendment to its existing credit agreement dated March 6, 2007 which included,
among other things, amendments to the Change of Control definition and certain other provisions and definitions related thereto.
The Change of Control definition was amended to conform to the provision contained in Charter Operating's credit agreement as
described below. Previously, the percentage of voting power necessary for a Change of Control had been 35%, and the definition
of Change of Control did not include a Ratings Event.
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.
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.
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 had a delayed draw component: $250 million was funded on closing of the term loan A and the remaining
$500 million was funded in March 2012. The proceeds were used along with proceeds of the CCO Holdings 2020 Notes to finance
the repurchase of certain Charter Operating's 8.000% and 10.875% senior second-lien notes and certain of CCH II's 13.500%
senior notes discussed above.
In April 2012, Charter Operating entered into a senior secured term loan D 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, 2019. Pricing on the new term
loan D was set at LIBOR plus 3% with a LIBOR floor of 1% , and issued at a price of 99.5% of the aggregate principal amount.
The proceeds were used to refinance Charter Operating's existing term loan B-1 and term loan B-2, both due 2014, with the
remaining amount used to pay down a portion of its existing term loan C due 2016. Charter Operating concurrently amended and
restated its existing $1.3 billion revolving credit facility with a new $1.15 billion revolving credit facility due 2017 at the interest
rate of LIBOR plus 2.25% and amended and restated its existing credit agreement dated March 31, 2010 (the “Existing Credit
Agreement”). The amendments to the Existing Credit Agreement included, among other things, certain allowances under the
negative covenants, including an allowance for restricted payments so long as the Consolidated Leverage Ratio as defined in the
Charter Operating credit agreement is no greater than 3.5 after giving pro forma effect to such restricted payment, the calculation
of certain financial covenants and changes to the related financial definitions, and the thresholds for certain events of default,
including a modification of the Change of Control definition. The Change of Control definition was amended to conform to the
provision contained in the CCO Holdings' indentures so that a Change of Control would now occur upon both the consummation
of a transaction resulting in any person or group having the power to vote more than 50% of the ordinary voting power and a
Ratings Event as defined in the Charter Operating credit agreement. The Change of Control definition previously contained the
more than 50% threshold without the Ratings Event trigger. The Company recorded a loss on extinguishment of debt of
approximately $59 million during the year ended December 31, 2012 related to these transactions.
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;