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SEC Filings

S-1
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1 on 07/28/1999
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company obligations of the Falcon borrower and its subsidiaries, but are not
secured by other assets of the Falcon borrower or its subsidiaries.
 
     The Falcon borrower credit facilities currently in effect provide for the
$350 million incremental availability referred to above, which we are currently
in the process of soliciting from the existing lenders. This facility is in the
form of an additional revolving loan. Upon the effectiveness of the amendment
and restatement of the Falcon borrower credit facilities at the time of the
acquisition of Falcon borrower by Charter Holdco, up to an additional $350
million supplemental facility will be available.
 
     The Falcon borrower credit facilities also contain provisions requiring
mandatory loan prepayments under certain circumstances, such as when significant
amounts of assets are sold and the proceeds are not promptly reinvested in
assets useful in the business of Falcon borrower. Interest rates for the Falcon
Operating credit facilities, as well as a fee payable on unborrowed amounts
available under these facilities, will depend upon performance measured by a
"leverage ratio," or, the ratio of indebtedness to annualized operating cash
flow. Annualized operating cash flow is defined as the immediately preceding
quarter's operating cash flow, before management fees, multiplied by four. This
leverage ratio is based on the debt of Falcon borrower and its subsidiaries,
exclusive of the Falcon debentures described below.
 
     The Falcon borrower credit facilities provide the Falcon borrower with two
interest rate options, to which a margin is added: a base rate option, generally
the "prime rate" of interest, and an interest rate option rate based on the
London InterBank Offered Rate. The Falcon borrower credit facilities contain
representations and warranties, affirmative and negative covenants, information
requirements, events of default and financial covenants. The financial
covenants, which are generally tested on a quarterly basis, measure performance
against standards set for leverage, debt service coverage, and operating cash
flow coverage of cash interest expense.
 
     Under most circumstances, acquisitions and investments may be made by CC
Holdings, Charter Operating or their subsidiaries without the consent of the
lenders as long as Charter Operating's operating cash flow for the four complete
quarters preceding the acquisition or investment equals or exceeds 1.75 times
the sum of the Falcon borrower's cash interest expense plus any restricted
payments, on a pro forma basis after giving effect to the acquisition or
investment.
 
     The Falcon borrower credit facilities also contain a change of control
provision, making it an event of default, and permitting acceleration of the
debt, in the event that either:
 
          (1) Mr. Allen, including his estate, heirs and other related entities,
     fails to maintain a 51% direct or indirect voting and economic interest in
     Falcon borrower, provided that after the consummation of an initial public
     offering by CC Holdings or an affiliate of CC Holdings, the economic
     interest percentage may be reduced to 25%, or
 
          (2) A change of control occurs under the indentures governing the CC
     Holdings notes.
 
     The various negative covenants place limitations on the Falcon borrower's
ability of CC Holdings, Charter Operating and their subsidiaries to, among other
things, incur debt, pay dividends, incur liens, make acquisitions, investments
or assets sales, or enter into transactions with affiliates. Distributions by
Falcon borrower under its credit facilities to pay interest on the Falcon
debentures are generally permitted, except during the existence of a default
under the credit facilities. This summary is qualified in its entirety by
reference to the Falcon borrower credit agreement and the related documents
pertaining to these credit facilities.
 
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