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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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<PAGE>   614
                        BRESNAN COMMUNICATIONS GROUP LLC
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                                 MARCH 31, 1999
                                  (UNAUDITED)
                                 (IN THOUSANDS)
 
(b) On February 2, 1999, the Company sold $170,000 aggregate principal amount
    senior notes payable (the "Senior Notes"). In addition, on the same date,
    the Company issued $275,000 aggregate principal amount at maturity of senior
    discount notes, (the "Senior Discount Notes") for approximately $175,000
    gross proceeds collectively (the "Notes").
 
     The Senior Notes are unsecured and will mature on February 1, 2009. The
     Senior Notes bear interest at 8% per annum payable semi-annually on
     February 1 and August 1 of each year, commencing August 1, 1999.
 
     The Senior Discount Notes are unsecured and will mature on February 1,
     2009. The Senior Discount Notes were issued at a discount to their
     aggregate principal amount at maturity and will accrete at a rate of
     approximately 9.25% per annum, compounded semi-annually, to an aggregate
     principal amount of $275,000 on February 1, 2004. Subsequent to February 1,
     2004, the Senior Discount Notes will bear interest at a rate of 9.25% per
     annum payable semi-annually in arrears on February 1 and August 1 of each
     year, commencing August 1, 2004.
 
     The Company may elect, upon not less than 60 days prior notice, to commence
     the accrual of interest on all outstanding Senior Discount Notes on or
     after February 1, 2002, in which case the outstanding principal amount at
     maturity of each Senior Discount Note will on such commencement date be
     reduced to the accreted value of such Senior Discount Note as of such date
     and interest shall be payable with respect to the Senior Discount Notes on
     each February and August 1 thereafter.
 
     The Company may not redeem the Notes prior to February 1, 2004 except that
     prior to February 1, 2002, the Company may redeem up to 35% of the Senior
     Notes and Senior Discount Notes at redemption prices equal to 108% and 109%
     of the applicable principal amount or accreted value. Subsequent to
     February 1, 2004, the Company may redeem the Notes at redemption prices
     declining annually from approximately 104% of the principal amount or
     accreted value.
 
     Bresnan Communications Group LLC and its wholly owned subsidiary Bresnan
     Capital Corporation are the sole obligors of the Senior Notes and Senior
     Discount Notes. Bresnan Communications Group LLC has no other assets or
     liabilities other than its investment in its wholly owned subsidiary
     Bresnan Telecommunications Company LLC. Bresnan Capital Corporation has no
     other assets or liabilities.
 
     Upon change of control of the Company, the holders of the notes have the
     right to require the Company to purchase the outstanding notes at a price
     equal to 101% of the principal amount or accrete value plus accrued and
     unpaid interest.
 
     BCG has entered into an interest rate swap agreement to effectively fix or
     set a maximum interest rate on a portion of its floating rate long-term
     debt. BCG is exposed to credit loss in the event of nonperformance by the
     counterparties to the interest rate swap agreement.
 
     At March 31, 1999, such Interest Rate Swap agreement effectively fixed or
     set a maximum interest rate between 7.89% and 8.08% on an aggregate
     notional principal amount of $110,000 which rate would become effective
     upon the occurrence of certain events. The effect of the Interest Rate Swap
     on interest expense for the three months ended March 31, 1998 and 1999 was
     not significant. The expiration dates of the Interest Rate Swaps ranges
     from August 25, 1999 to April 3, 2000. The difference between the fair
     market value and book value of long-term debt and the Interest Rate Swap at
     March 31, 1998 and 1999 is not significant.
 
                                      F-470