Charter 2015 Annual Report Download - page 115

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, 2014 AND 2013
(dollars in millions, except share or per share data or where indicated)
F- 18
Loss on extinguishment of debt consists of the following for the years ended December 31, 2015, 2014 and 2013:
Year ended December 31,
2015 2014 2013
CCO Holdings notes repurchases $ 123 $ — $ 65
Charter Operating credit amendment / prepayments — — 58
CCOH Safari notes and CCO Safari Term G Loans repayments 5 — —
$ 128 $ — $ 123
On April 25, 2014, the Company entered into a binding definitive agreement (the “Comcast Transactions Agreement”) with Comcast
Corporation (“Comcast”), which contemplated the following transactions: (1) an asset purchase, (2) an asset exchange and (3) a
contribution and spin-off transaction (collectively, the “Comcast Transactions”). Pursuant to the terms of the Comcast Transactions
Agreement, Comcast had the right to terminate the Comcast Transactions Agreement upon termination of the merger agreement
among Comcast, TWC and Tango Acquisition Sub, Inc. (the “Comcast Merger Agreement”). On April 24, 2015, Comcast and
TWC terminated the Comcast Merger Agreement, and Comcast delivered a notice of termination of the Comcast Transactions
Agreement to Charter (the “Termination Notice”). As a result of the termination, proceeds from the issuance of $3.5 billion
aggregate principal amount of CCOH Safari notes and $3.5 billion aggregate principal amount of CCO Safari, LLC ("CCO Safari")
Term G Loans ("Term G Loans"), which were held in escrow and intended to fund the closing of the Comcast Transactions, were
utilized to settle the related debt obligation in April 2015. These transactions resulted in a loss on extinguishment of debt of
approximately $5 million for the year ended December 31, 2015.
CCOH Safari Notes
In November 2015, CCOH Safari, a wholly owned subsidiary of the Company, closed on transactions in which it issued $2.5
billion aggregate principal amount of 5.750% senior unsecured notes due 2026 (the "2026 Notes"). The net proceeds from the
issuance of the 2026 Notes were deposited into an escrow account and will be used to partially finance the TWC Transaction as
well as for general corporate purposes. The release of the proceeds to the Company is subject to satisfaction of certain conditions,
including the closing of the TWC Transaction. Substantially concurrently with the escrow release, the 2026 Notes will become
obligations of CCO Holdings and CCO Holdings Capital. CCOH Safari will merge into CCO Holdings. Contingent upon closing
of the TWC Transaction and release of the proceeds from escrow, the Company will be obligated to pay approximately $40 million
of additional debt issuance fees. Should the Merger Agreement be terminated prior to the consummation of the TWC Transaction,
or upon expiration of the escrow agreement on May 23, 2016 (or six months following such date in the event of an extension of
the Merger Agreement), such amounts placed in escrow must be used to settle amounts outstanding under the 2026 Notes at par
value. The amounts held in escrow are classified as noncurrent restricted cash and cash equivalents in the Company's consolidated
balance sheet as of December 31, 2015.
Initially, the 2026 Notes are senior debt obligations of CCOH Safari. Upon release of the proceeds from escrow, the 2026 Notes
will be senior debt obligations of CCO Holdings and CCO Holdings Capital Corp. and rank equally with all other current and
future unsecured, unsubordinated obligations of CCO Holdings and CCO Holdings Capital Corp. The 2026 Notes are structurally
subordinated to all obligations of subsidiaries of CCO Holdings, including the Charter Operating credit facilities.
Following the release of the proceeds, CCO Holdings may redeem some or all of the 2026 Notes at any time at a premium. The
optional redemption price declines to 100% of the principal amount, plus accrued and unpaid interest, if any, on or after varying
dates in 2021 through 2024.
In addition, at any time following the release of the proceeds and prior to February 15, 2019, CCO Holdings and CCO Holdings
Capital Corp. may redeem up to 40% of the aggregate principal amount of such 2026 Notes at a redemption price at a premium
plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more equity offerings (as defined in
the indenture); provided that certain conditions are met.