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SEC Filings

S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 09/28/1999
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<PAGE>   716
                        BRESNAN COMMUNICATIONS GROUP LLC
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                                 JUNE 30, 1999
                                  (UNAUDITED)
                                 (IN THOUSANDS)
 
    limitations on additional investments, indebtedness, capital expenditures,
    asset sales and affiliate transactions.
 
(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 and accreted value, respectively.
    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 accreted value plus accrued and
    unpaid interest. (See note 6 "Proposed Sale of the Company").
 
    BTC has entered into interest rate swap agreements to effectively fix or set
    maximum interest rates on a portion of its floating rate long-term debt. BTC
    is exposed to credit loss in the event of nonperformance by the
    counterparties to the interest rate swap agreements.
 
    At June 30, 1999, such Interest Rate Swap agreements effectively fixed or
    set a maximum LIBOR base interest rates between 5.84% and 8.08% on an
    aggregate notional principal amount of $110,000 which rates would become
    effective upon the occurrence of certain events. The effect of the Interest
    Rate Swap on interest expense for the six months ended
                                      F-471