Charter units to spend $843 million to purchase notes in tender offers

By Susanna Moon

Chicago, Jan. 11 - Charter Communications, Inc. said its subsidiaries Charter Communications Operating, LLC and CCH II, LLC began tender offers for three series of notes. The companies will spend up to $843 million to purchase the notes.

In the tender offers, Charter Communications will purchase its outstanding 8% senior second-lien notes due 2012 and 10 7/8% senior second-lien notes due 2014.

The total amount required to purchase the first two series of notes tendered by the early deadline, excluding accrued interest, is $843 million, or equal to the tender offer cap, according to a press release.

After giving priority to the Charter notes, CCH II will purchase up to $250 million of its 13½% senior notes due 2016. The purchase amount may not be more than the tender offer cap less the amount spent to purchase the Charter notes.

Charter Operating is also seeking consents from a majority of the holders of the 8% notes and 10 7/8% notes to remove the covenants under the notes.

For each $1,000 principal amount, the total price will be $1,019.40 for the 8% notes, $1,068.35 for the 10 7/8% notes and $1,155.00 for the 13½% notes tendered by the early deadline at 5 p.m. ET on Jan. 25. The total price includes an early tender premium of $25.00 per $1,000 of notes.

Holders who tender after the early date will not receive the early tender premium.

The offers will run until 11:59 p.m. ET on Feb. 8.

Tendered notes may be withdrawn by the early tender deadline.

The offers are conditioned on obtaining financing for the purchase.

CCO Holdings, LLC and CCO Holdings Capital Corp. plan to publicly offer $750 million principal amount of senior notes due 2022 to help fund the offers, along with drawdowns under Charter's revolving credit facility.

Credit Suisse Securities (USA) LLC (800 820-1653 or collect 212 325-5912), Citigroup Global Markets Inc. (800 558-3745 or collect 212 723-6106) and UBS Securities LLC (888 719-4210) are the dealer managers for the tender offer. Global Bondholder Services Corp. (866 389-1500 or collect 212 430-3774) was the information agent.

Charter is a St. Louis-based cable operator and broadband communications company.

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