Charter 2013 Annual Report Download - page 65

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Charter Operating Credit Facilities
The Charter Operating credit facilities have an outstanding principal amount of $3.5 billion at December 31, 2013 as follows:
• A term loan A with a remaining principal amount of $722 million, which is repayable in equal quarterly installments
and aggregating $38 million in 2014 and 2015, $66 million in 2016 and $75 million in 2017, with the remaining balance
due at final maturity on April 22, 2018;
• A term loan E with a remaining principal amount of approximately $1.5 billion, which is repayable in equal quarterly
installments and aggregating $15 million in each loan year, with the remaining balance due at final maturity on July
1, 2020;
• A term loan F with a remaining principal amount of approximately $1.2 billion, which is repayable in equal quarterly
installments and aggregating $12 million in each loan year, with the remaining balance due at final maturity on January
3, 2021; and
• A revolving loan with an outstanding balance of $140 million at December 31, 2013 and allowing for borrowings of
up to $1.3 billion, maturing on April 22, 2018.
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 and revolver is currently 2.00%. The term
E and F loans bear interest at LIBOR plus 2.25%, with a LIBOR floor of 0.75%. Charter Operating pays interest equal to LIBOR
plus 2.00% on amounts borrowed under the revolving credit facility and pays a revolving commitment fee of 0.30% 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 amortization as set
forth in the notices establishing such term loans. Although the Charter Operating credit facilities allow for the incurrence of a
certain amount of incremental term loans subject to pro-forma compliance with its financial maintenance covenants, 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 5.5 to 1.0. See “—Summary of Restricted Covenants of Our Notes.” Any failure to maintain
the leverage ratio under the CCO Holdings credit facility is not an event of default but would negatively impact CCO Holdings'
ability to incur additional debt or make distributions to its parent. At December 31, 2013, CCO Holdings' leverage ratio was
approximately 4.5 to 1.0 for purposes of the CCO Holdings credit facility. 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.
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