Charter 2015 Annual Report Download - page 116

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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- 19
In the event of specified change of control events, CCO Holdings must offer to purchase the 2026 Notes from the holders at a
purchase price equal to 101% of the total principal amount of the notes, plus any accrued and unpaid interest.
CCO Holdings Notes
In April 2015, CCO Holdings, LLC ("CCO Holdings") and CCO Holdings Capital Corp. closed on transactions in which they
issued $1.15 billion aggregate principal amount of 5.125% senior unsecured notes due 2023 (the "2023 Notes"), $750 million
aggregate principal amount of 5.375% senior unsecured notes due 2025 (the "2025 Notes") and $800 million aggregate principal
amount of 5.875% senior unsecured notes due 2027 (the "2027 Notes"). The net proceeds from the issuance of the 2023 Notes
and 2025 Notes were used to finance tender offers and a subsequent call in which $1.0 billion aggregate principal amount of CCO
Holdings' outstanding 7.250% senior notes due 2017 and $700 million aggregate principal amount of CCO Holdings' outstanding
8.125% senior notes due 2020 were repurchased, as well as for general corporate purposes. The net proceeds from the issuance
of the 2027 Notes were used to call $800 million of the $1.4 billion aggregate principal amount of CCO Holdings' outstanding
7.000% senior notes due 2019. These debt repurchases resulted in a loss on extinguishment of debt of $123 million for the year
ended December 31, 2015.
The CCO Holdings notes are guaranteed by Charter. They are 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 CCO Holdings notes are structurally subordinated to all obligations of subsidiaries of CCO Holdings, including
the Charter Operating credit facilities. Upon consummation of the TWC Transaction, the CCO Holdings notes will not be guaranteed
by Charter or New Charter.
CCO Holdings may redeem some or all of the CCO Holdings notes at any time at a premium. The optional redemption price
declines to 100% of the respective series’ principal amount, plus accrued and unpaid interest, if any, on or after varying dates in
2016 through 2024.
In addition, at any time prior to varying dates in 2016 through 2021, CCO Holdings may redeem up to 35% (40% in regards to
the 2023 Notes, 2025 Notes and 2027 Notes issued in April 2015) of the aggregate principal amount of the 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.
In the event of specified change of control events, CCO Holdings must offer to purchase the outstanding CCO Holdings notes
from the holders at a purchase price equal to 101% of the total principal amount of the notes, plus any accrued and unpaid interest.
High-Yield Restrictive Covenants; Limitation on Indebtedness.
The indentures governing the CCO Holdings notes and CCOH Safari notes (following the release of proceeds from escrow) contain
certain covenants that restrict the ability of CCO Holdings, CCO Holdings Capital Corp. and all of their restricted subsidiaries to:
• incur additional debt;
• pay dividends on equity or repurchase equity;
• make investments;
• sell all or substantially all of their assets or merge with or into other companies;
• sell assets;
• in the case of restricted subsidiaries, create or permit to exist dividend or payment restrictions with respect to CCO
Holdings, guarantee their parent companies debt, or issue specified equity interests;
• engage in certain transactions with affiliates; and
• grant liens.
The above limitations in certain circumstances regarding incurrence of debt, payment of dividends and making investments
contained in the indentures of CCO Holdings and CCOH Safari permit CCO Holdings and its restricted subsidiaries to perform
the above, so long as, after giving pro forma effect to the above, the leverage ratio would be below a specified level for the issuer.
The leverage ratio under the indentures is 6.0 to 1.0.