Business Context and Reporting Period
This Form 8-K was filed by Altice USA, Inc. on October 19, 2018. The filing reports on material definitive agreements entered into between October 15 and October 18, 2018, by Altice USA and its indirect, wholly-owned subsidiaries. The primary purpose of these agreements is to amend existing debt indentures and credit facilities to facilitate a pending corporate combination (the "Combination").
Key Financial Metrics and Debt Structure
The filing details significant debt restructuring activities involving the exchange of existing notes for new notes and the addition of new credit facilities. No revenue, profit, or cash flow metrics are provided in this filing.
| Instrument | Principal Amount | Coupon Rate | Maturity Date | Key Action |
|---|---|---|---|---|
| 5.375% Senior Secured Notes | $1,095,493,000 | 5.375% | July 15, 2023 | Exchanged for New Notes |
| 5.500% Senior Secured Notes | $1,495,642,000 | 5.500% | May 15, 2026 | Exchanged for New Notes |
| 5.125% Senior Notes (May 2013) | $739,279,000 | 5.125% | Dec 15, 2021 | Exchanged for New Notes |
| 5.125% Senior Notes (Sept 2014) | $493,049,000 | 5.125% | Dec 15, 2021 | Exchanged for New Notes |
| 7.750% Senior Notes | $610,698,000 | 7.750% | July 15, 2025 | Exchanged for New Notes |
| 7.500% Senior Notes | $1,045,443,000 | 7.500% | April 1, 2028 | Exchanged for New Notes |
| Incremental Term Loans | $1,275,000,000 | LIBOR + 2.25% / Base + 1.25% | Jan 15, 2026 | New Commitment Added |
Material Changes Versus Prior Period
The filing does not provide comparative financial performance data. The material changes reported are structural modifications to the company's debt obligations:
- Note Exchanges: Approximately $5.48 billion in aggregate principal amount of existing senior notes were exchanged for new notes with identical interest rates and maturities but modified indenture terms.
- Indenture Amendments: Supplemental indentures were executed to amend restrictive covenants, events of default, and other obligations. These amendments are designed to become operative immediately prior to the "Combination."
- Debt Capacity Expansion: A Sixth Amendment to the Credit Agreement added $1.275 billion in incremental term loan commitments.
Guidance, Outlook, and Risks
Management Commentary and Outlook: The filing indicates that the amendments to the indentures and the new credit facility are contingent upon the occurrence of the "Combination." The new notes include an automatic exchange feature where, upon the Combination, they will be exchanged for notes issued by CSC Holdings, LLC.
Risks and Contingencies:
- Combination Contingency: The operative effect of the indenture amendments is conditional on the successful completion of the Combination.
- Call Premiums: Voluntary prepayments of the new Incremental Term Loans within six months of the draw date are subject to a 1.0% call premium.
- Use of Proceeds: Proceeds from the $1.275 billion Incremental Term Loans are designated to repay outstanding borrowings under a term loan facility dated June 12, 2015.
Investor Verification Checklist
- Verify the status and expected closing date of the "Combination" referenced throughout the filing.
- Confirm the specific changes to restrictive covenants and events of default in the Supplemental Indentures (Exhibits 4.1 through 4.4).
- Review the terms of the Sixth Amendment to the Credit Agreement (Exhibit 4.11) regarding the $1.275 billion incremental loan.
- Assess the impact of the automatic exchange feature on the new notes if the Combination occurs.
- Check for any subsequent filings regarding the drawdown of the Incremental Term Loans.