ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Issuance of 5.500% Senior Notes due 2026
On
April 21, 2016 (the Closing Date), CCO Holdings, LLC (CCO Holdings) and CCO Holdings Capital Corp. (together with CCO Holdings, the Issuers), subsidiaries of Charter Communications, Inc. (the
Company), issued $1.5 billion aggregate principal amount of 5.500% Senior Notes due 2026 (the Notes). The Notes were sold to qualified institutional buyers in reliance on Rule 144A and outside the United States to
non-U.S. persons in reliance on Regulation S. The Notes have not been registered under the Securities Act of 1933, as amended (the Securities Act), or any state securities laws and, unless so registered, may not be offered or sold in the
United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The payment obligations under the Notes are guaranteed on a senior
unsecured basis by the Company, which guarantee will be released upon the merger of the Company into CCO Holdings, which is expected to occur upon consummation of the previously announced transaction (the Bright House Transaction) with
Advance/Newhouse Partnership as contemplated by the definitive Contribution Agreement, dated as of March 31, 2015, among the Company, Advance/Newhouse Partnership, A/NPC Holdings LLC, CCH I, LLC (New Charter) and Charter
Communications Holdings, LLC (as may be amended from time to time, the Contribution Agreement).
The offering and sale of the Notes resulted
in net proceeds of approximately $1.49 billion, after deducting initial purchasers discounts and commissions. The Company intends to use the net proceeds from the offering, together with the proceeds from the Issuers 5.875% Senior Notes
due 2024 issued on February 19, 2016, for one or more of the following: (i) to repurchase or redeem the Issuers outstanding 7.000% Senior Notes due 2019 and 7.375% Senior Notes due 2020 and pay related fees and expenses; (ii) to
repurchase or redeem the Issuers outstanding 6.500% Senior Notes due 2021 and pay related fees and expenses and (iii) for general corporate purposes. Any redemption or repurchase of the Issuers outstanding 6.500% Senior Notes due
2021 would not take place until after the Company determines the amount, if any, of the incremental cash proceeds to Time Warner Cable Inc. (TWC) stockholders if they were to elect $115 per share in cash rather than $100 per share as
consideration in the previously announced transaction with TWC (the TWC Transaction and, together with the Bright House Transaction, the Transactions) pursuant to the Agreement and Plan of Mergers, dated as of May 23,
2015, by and among the Company, New Charter, Nina Corporation I, Inc., Nina Company II, LLC, Nina Company III, LLC and TWC, as it may be amended. Any redemption or repurchase of notes would not take place until after such cash elections were
determined.
In connection therewith, the Issuers and the Company entered into the following agreements:
Indenture
On the Closing Date, the Issuers and
the Company, as guarantor, entered into a Seventh Supplemental Indenture with The Bank of New York Mellon Trust Company, N. A., as trustee (the Trustee), providing for the issuance of the Notes and the terms thereof (the
Supplemental Indenture). The Supplemental Indenture supplements a base indenture entered into on November 5, 2014, among CCOH Safari, LLC, the Issuers, the Company, as guarantor, and the Trustee (the Base Indenture and,
together with the Supplemental Indenture, the Indenture) providing for the issuance of the Notes generally. The Indenture provides, among other things, that the Notes are general
unsecured obligations of the Issuers. Interest is payable on the Notes on each May 1 and November 1, commencing November 1, 2016. At any time and from time to time prior to
May 1, 2021, the Issuers may redeem the outstanding Notes in whole or in part at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, on such Notes to the redemption date, plus a make-whole
premium. On or after May 1, 2019, the Issuers may redeem some or all of the outstanding Notes at redemption prices set forth in the Supplemental Indenture. In addition, at any time prior to May 1, 2019, the Issuers may redeem up to 40% of
the aggregate principal amount of the Notes using net proceeds from certain equity offerings at a redemption price, as determined by the Issuers, equal to 105.500% of the principal amount thereof, plus accrued and unpaid interest and special
interest, if any, to the redemption date, provided that certain conditions are met.
The payment obligations under the Notes are guaranteed on a senior
unsecured basis by the Company, which guarantee will be released upon the merger of the Company into CCO Holdings, which is expected to occur upon consummation of the Bright House Transaction.
The terms of the Indenture, among other things, limit the ability of the Issuers to incur additional debt and issue preferred stock; pay dividends or make
other restricted payments; make certain investments; grant liens; allow restrictions on the ability of certain of its subsidiaries to pay dividends or make other payments; sell assets; merge or consolidate with other entities; and enter into
transactions with affiliates.
Subject to certain limitations, in the event of a Change of Control (as defined in the Supplemental Indenture), the Issuers
will be required to make an offer to purchase all of the Notes at a price equal to 101% of the aggregate principal amount of the Notes repurchased, plus accrued and unpaid interest and special interest, if any, to the date of repurchase thereof.
The Indenture provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among others,
nonpayment of principal or interest; breach of other covenants or agreements in the Indenture; failure to pay certain other indebtedness; failure to pay certain final judgments; failure of certain guarantees to be enforceable; and certain events of
bankruptcy or insolvency. Generally, if an event of default occurs, the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.
Registration Rights Agreement
In connection with
the sale of the Notes, the Issuers and the Company, as guarantor, entered into an Exchange and Registration Rights Agreement with respect to the Notes, dated as of April 21, 2016 (the Registration Rights Agreement), with Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co., UBS Securities LLC and Wells Fargo Securities, LLC, as
representatives of the several Purchasers (as defined in the Registration Rights Agreement). Under the Registration Rights Agreement, the Issuers and the Company, as guarantor, have agreed to file a registration statement with respect to an offer to
exchange the Notes for a new issue of substantially identical notes registered under the Securities Act, to cause the exchange offer registration statement to be declared effective and to consummate the exchange offer no later than 365 days
following the date of consummation or termination of the Bright House Transaction in accordance with the terms of the Contribution Agreement and the Amended and Restated Stockholders Agreement, dated as of May 23, 2015, among the Company,
Liberty Broadband Corporation, Advance/Newhouse Partnership and New Charter, as may be further amended. The Issuers and the Company, as guarantor, may be required to provide a shelf registration statement to cover resales of the Notes under certain
circumstances. If the foregoing obligations are not satisfied, the Issuers may be required to pay holders of the Notes additional interest at a rate of 0.25% per annum of the principal amount thereof for 90 days immediately following the
occurrence of any registration default. Thereafter, the amount of additional interest will increase by an additional 0.25% per annum of the principal amount thereof to 0.50% per annum of the principal amount thereof until all registration
defaults have been cured.
Copies of the Supplemental Indenture, the form of the Notes, and the Registration Rights Agreement are filed herewith as
Exhibits 4.1, 4.2 and 10.1, respectively, and are each incorporated herein by reference. The foregoing descriptions of the Indenture, the Notes and the Registration Rights Agreement do not purport to be complete and are qualified in their
entirety by reference to the full text of those documents.
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