Charter 2013 Annual Report Download - page 66

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52
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 including the covenant to maintain the consolidated leverage ratio at or
below 5.0 to 1.0 and the consolidated first lien leverage ratio at or below 4.0 to 1.0;
• 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.
At December 31, 2013, Charter Operating had a consolidated leverage ratio of approximately 1.3 to 1.0 and a consolidated first
lien leverage ratio of 1.1 to 1.0. Both ratios are in compliance with the ratios required by the Charter Operating credit facilities.
A failure by Charter Operating to maintain the financial covenants would result in an event of default under the Charter Operating
credit facilities and the debt of CCO Holdings. See “- Cross Acceleration” and “Risk Factors - The agreements and instruments
governing our debt contain restrictions and limitations that could significantly affect our ability to operate our business, as well
as significantly affect our liquidity."
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.