Charter 2015 Annual Report Download - page 118

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- 21
Charter Operating Credit Facilities
The Charter Operating credit facilities have an outstanding principal amount of $3.6 billion at December 31, 2015 as follows:
• A term loan A with a remaining principal amount of $647 million, which is repayable in quarterly installments and
aggregating $66 million in 2016 and $75 million in 2017, with the remaining balance due at final maturity on April 22,
2018. Pricing on term loan A is LIBOR plus 2%;
• 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. Pricing on term loan E is LIBOR plus 2.25% with a LIBOR floor of 0.75%;
• 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. Pricing on term loan F is LIBOR plus 2.25% with a LIBOR floor of 0.75%; and
• A revolving loan with an outstanding balance of $273 million at December 31, 2015 and allowing for borrowings of
up to $1.3 billion, maturing on April 22, 2018. Pricing on the revolving loan is LIBOR plus 2% with a commitment
fee of 0.30%.
Amounts outstanding under the Charter Operating credit facilities bear interest, at Charter Operating’s election, at a base rate or
LIBOR (0.42% and 0.17% as of December 31, 2015 and December 31, 2014, respectively), as defined, plus an applicable margin.
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 the Company 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 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 any of Charter
Operating’s subsidiaries, as well as inter-company obligations owing to it by any of such entities.
Charter Operating Credit Facilities — Restrictive Covenants
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
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 note indentures 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