Charter to issue $250 million 10¼% notes, $456.6 million 11% notes in exchange offer for 12 notes series

By Jennifer Chiou

New York, Sept. 13 - Charter Communications, Inc. said its wholly owned, indirect subsidiaries CCH II, LLC and CCH I, LLC wrapped offers to issue up to $875 million of new notes in exchange for 12 series of outstanding notes issued by their indirect parent company, Charter Communications Holdings, LLC.

CCH II will issue $250 million of new 10¼% senior notes due 2013 and CCH I will issue $456.6 million of 11% senior secured notes due 2015 in exchange for $791.3 million of Charter Holdings notes.

The $791.3 million tendered notes consisted of $307.9 million of notes due 2009 and 2010 and $483.4 million of notes due 2011 and 2012 Notes.

The offers ended at 11:59 p.m. ET on Sept. 12, pushed back from 11:59 p.m. ET on Sept. 8. As previously announced, notes tendered before the new expiration will be eligible to receive the early participation payment.

As already amended, CCH II said it would issue up to $250 million, increased from $200 million, of new 10¼% notes and CCH I would issue up to $625 million, instead of $675 million, of 11% notes in exchange for the old notes.

At 5 p.m. ET on Aug. 29, the company said it received tenders from holders of $483.1 million of notes, consisting of $183.1 million of notes due 2009 and 2010 and $300.0 million of notes due 2011 and 2012, unchanged from the previous early deadline on Aug. 24.

Based on the current tenders, the company said 95.4% of the notes due 2009 and 2010 will be exchanged for CCH II notes and the balance will be exchanged for CCH I notes, and all tendered notes due 2011 and 2012 will be exchanged for CCH I notes.

As already announced, the purpose of the exchange offers is to improve Charter's financial flexibility by extending debt maturities and reducing overall debt. The offers began on Aug. 11.

As of the deadline, the company said it received tenders from holders of:

• $104.664 million of its $292.0 million of 8 5/8% senior notes due 2009

• $49.328 million of its $154.2 million of 10% senior notes due 2009

• $60.135 million of its $130.9 million of 10¾% senior notes due 2009

• $55.22 million of its $107.3 million of 9 5/8% senior notes due 2009

• $16.58 million of its $48.8 million of 10¼% senior notes due 2010

• $21.971 of its $43.2 million of 11¾% senior discount notes due 2010

• $164.747 million of its $217.3 million of 11 1/8% senior notes due 2011

• $134.566 million of its $197.6 million of 9.92% senior discount notes due 2011

• $65.288 million of its $136.7 million of 10% senior notes due 2011

• $64.424 million of its $124.6 million of 11¾% senior discount notes due 2011

• $32.514 million of its $94.3 million of 13½% senior discount notes due 2011

• $21.85 million of its $112.9 million of 12 1/8% senior discount notes due 2012

The total consideration for each series (see table below) includes an early participation payment of $50.00 of new notes for noteholders who tendered by the deadline. All noteholders who exchange will also receive accrued interest up to but excluding the settlement date.

The new CCH II notes will mature on Oct. 1, 2013, will be unconditionally guaranteed by Charter Holdings and will accrue interest from and including the settlement date.

The new CCH I notes will be substantially identical in all respects to the existing $3.525 billion of 11% senior secured notes due 2015, except that they will initially be subject to certain restrictions on transfer and will have a separate CUSIP number from the existing CCH I notes and thus will not be fungible with the existing CCH I notes.

Together with the existing CCH I notes, the CCH I notes will have the benefit of additional collateral consisting of 70% of all outstanding class A preferred units in CC VIII, LLC. Such CC VIII units will be contributed to CCH I by Charter Holdings' direct parent, CCHC, LLC, on or prior to the settlement date.

Charter said all validly tendered notes with maturities in 2009 and 2010 will be accepted. However, if the number of notes tendered requires the issue of more than $200 million of new CCH II notes, some noteholders will receive new CCH I notes instead. Likewise, if the number of notes tendered requires the issue of more than $675 million of new CCH I notes, some noteholders will receive CCH II notes instead.

After all valid tenders of notes due in 2009 or 2010 notes are accepted, all valid tenders of notes with maturities in 2011 and 2012 will be accepted. If the maximum amount of CCH II notes or CCH I notes has been issued, however, tendered notes will be exchanged for new notes available on a pro rata basis according to the maximum amount of CCH II notes or CCH I notes remaining. Any notes due in 2011 or 2012 not accepted as a result of the pro ration will be returned.

In an offer that expired at 11:59 p.m. ET on Sept. 8, Charter subsidiary CCHC, LLC and CCH II said they accepted $450 million of the $499.9 million of notes tendered in the exchange offer for up to $450 million of their $862.5 million 5.875% convertible senior notes due 2009.

Documents relating to these private offers will be distributed to noteholders who complete a letter of eligibility. Noteholders may obtain a copy of the letter from Global Bondholder Service Corp. (866 470-3700 or 212 430-3774), the information agent for the exchange offers.

Charter is a St. Louis-based broadband communications company.

Table: Charter senior notes exchange offer

Old notes to be exchanged New notes per $1,000 principal amount of old notes

CCH II notes CCH I notes

$292.0 million 8 5/8% senior notes due 2009 $925.00 $997.50

$154.2 million 10% senior notes due 2009 $926.25 $997.50

$130.9 million 10¾% senior notes due 2009 $935.00 $997.50

$107.3 million 9 5/8% senior notes due 2009 $925.00 $997.50

$48.8 million 10¼% senior notes due 2010 $851.25 $997.50

$43.2 million 11¾% senior discount notes due 2010 $935.00 $997.50

$$217.3 million 11 1/8% senior notes due 2011 $810.00 $900.00

$197.6 million 9.92% senior discount notes due 2011 $772.50 $860.00

$136.7 million 10% senior notes due 2011 $740.00 $822.50

$124.6 million 11¾% senior discount notes due 2011 $790.00 $877.50

$94.3 million 13½% senior discount notes due 2011 $800.00 $888.75

$112.9 million 12 1/8% senior discount notes due 2012 $670.00 $745.00

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.