Cable Operators

Charter Amends Credit Agreements

New Debt Covenants Allows Flexibility for Acquisitions 7/08/2013 9:45 AM Eastern

Charter Communications filed documents with the Securities and Exchange Commission last week that would enable the mid-sized MSO to increase its debt load in the event of an attractive acquisitions opportunity.

Charter has been the focus of deal attention  ever since Liberty Media acquired a 27.3% interest in the company for $2.6 billion in May. Liberty chairman John Malone has called the 4.5-million subscriber MSO a “horizontal acquisitions  machine.”

In a filing with the SEC on July 2, Charter said among the amendments it had made was to modify ‘the restricted payment covenant to permit expanded flexibility for acquisitions.” The amendment affects about $4.8 billion in loans.

The amendment was made in part to allow Charter to complete its acquisition of Optimum West (formerly Bresnan Communications) as  well as any future deals.

On July 1, Charter executed an addition al term loan under its credit agreement, which allowed it to borrow an additional $1.5 billion, which was used in part for Optimum West. Charter agreed in February to pay Cablevision Systems $1.65 billion for Optimum West, which has about 375,000 residential and business customers in Wyoming, Colorado, Montana and Utah.

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