ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On August 17, 2005, indirect subsidiaries of Charter Communications, Inc., CCO Holdings, LLC (“CCO Holdings”) and CCO Holdings Capital Corp. (with CCO Holdings, the “Issuers”), entered into a Supplemental Indenture with Wells Fargo Bank, N.A., as trustee (the “Trustee”), which supplements the Indenture dated November 10, 2003 by and between the Issuers and the Trustee. Under the Supplemental Indenture, the Issuers issued $300 million principal amount of 8.75% senior notes due 2013 (the “Notes”).
The Notes have terms substantially identical to the Issuers previously issued 8.75% senior notes due 2013 that were originally issued under the Indenture in November 2003, except that the Notes will be subject to certain transfer restrictions until consummation of an exchange offer pursuant to the Exchange and Registration Rights Agreement described below. Accordingly, the Notes bear interest at 8.75% per annum, payable on May 15 and November 15 of each year, will mature on November 15, 2013 and are redeemable at the Issuers' option on or after November 15, 2008 at various redemption prices beginning at 104.375% in 2008 and declining to par in 2011. In addition, prior to November 15, 2006, the Issuers may redeem up to 35% of the Notes from the proceeds of certain equity offerings at a specified redemption price.
The Notes are unsecured and will rank equally with all of the existing and future senior unsecured debt of the Issuers and senior to all existing and future subordinated debt of the Issuers.
Upon a change of control, subject to certain conditions and restrictions, the Issuers may be required to offer to purchase all of the Notes at a purchase price of 101% of their principal amount plus accrued and unpaid interest, if any, to the date of the purchase.
On August 17, 2005, the Issuers also entered into an Exchange and Registration Rights Agreement with J.P. Morgan Securities Inc., Credit Suisse First Boston LLC, and Banc of America Securities LLC, as representatives of several purchasers of the Notes (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Issuers have agreed to file with the Securities Exchange Commission within ninety (90) days of the date of issuance of the Notes a registration statement with respect to a registered offer to exchange the Notes for registered notes with terms identical in all material respect to the Notes. In addition, the Issuers have agreed to use reasonable best efforts to cause the exchange offer registration statement to become effective within 210 days after the date of issuance and to cause the exchange offer to be consummated within 30 business days after the effective date of the exchange offer registration statement (or longer, if required by the federal securities laws). The Issuers have also agreed to file a shelf registration statement for the resale of the Notes if the Issuers cannot effect an exchange offer within the specified time period and in certain other circumstances. If the Issuers fail to comply with certain obligations under the Registration Rights Agreement, the Issuers will be required to pay special interest to holders of 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”), and, unless so registered, may not be offered or sold 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.
Copies of the Supplemental Indenture and Registration Rights Agreement are being filed with this report as Exhibit 10.1 and 10.2.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OR A REGISTRANT.
The information in Item 1.01 of this Form 8-K is hereby incorporated by reference to this Item 2.03.