Print Page  Close Window

SEC Filings

S-4
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form S-4 on 04/30/1999
Entire Document
 
<PAGE>   57
 
     We have insurance covering risks incurred with in the ordinary course of
business, including general liability, property and business interruption
coverage. As is typical in the cable television industry, we do not maintain
insurance covering our underground plant. Management believes that our coverage
is adequate.
 
THE REFINANCING
 
     In connection with the offering of the Original Notes, we consummated the
Tender Offers and we refinanced our previous credit facilities with the Credit
Facilities. On February 10, 1999, we commenced cash tender offers to purchase
any and all of (i) the 14% notes due 2007 issued by Charter Communications
Southeast Holdings, LLC and the 11.25% notes due 2006 issued by Charter
Communications Southeast, LLC (the "Charter Tender Offers") and (ii) the 13.50%
notes due 2004 issued by Marcus Cable Operating Company, L.L.C. and the 14.25%
notes due 2005 issued by Marcus Cable Company, L.L.C. (the "Marcus Tender
Offers" and, together with the Charter Tender Offers, the "Tender Offers"). All
notes except for $1.1 million were paid off by March 17, 1999.
 
     In conjunction with each of the Tender Offers, we also solicited consents
to certain proposed amendments to the indentures governing the notes we were
seeking to purchase. These amendments eliminated substantially all of the
restrictive covenants and modify certain other provisions of the indentures.
 
     Concurrently with the offering of the Original Notes, we entered into the
Credit Facilities to refinance our previous credit facilities. Borrowing
availability under the Credit Facilities totals $4.1 billion. Pro forma for the
Transactions, we have approximately $791 million of borrowing availability under
the Credit Facilities. In addition, an uncommitted incremental term facility of
up to $500 million with terms similar to the terms of the Credit Facilities is
permitted under the Credit Facilities, but will be conditioned on receipt of
additional new commitments from existing and new lenders. See "Description of
the Credit Facilities."
 
INTEREST RATE RISK
 
     The use of interest rate risk management instruments, such as interest rate
exchange agreements ("Swaps"), interest rate cap agreements ("Caps") and
interest rate collar agreements ("Collars"), is required under the terms of the
Credit Facilities. The Company's policy is to manage interest costs using a mix
of fixed and variable rate debt. Using Swaps, the Company agrees to exchange, at
specified intervals, the difference between fixed and variable interest amounts
calculated by reference to an agreed-upon notional principal amount. Caps are
used to lock in a maximum interest rate should variable rates rise, but enable
the Company to otherwise pay lower market rates. Collars limit the Company's
exposure to and benefits from interest rate fluctuations on variable rate debt
to within a certain range of rates.
 
                                       53