Business Context and Reporting Period
This Form 8-K was filed by Altice USA, Inc. on January 25, 2019, reporting events that occurred on January 24, 2019. The filing details a significant debt refinancing initiative executed by CSC Holdings LLC, an indirect wholly-owned subsidiary of the Company.
Key Financial Metrics and Debt Structure
- New Debt Issuance: Priced an offering of $1,500.0 million in aggregate principal amount of Senior Guaranteed Notes due 2029 (upsized from an initial $1,000.0 million).
- Interest Rate: The new Notes bear interest at 6.500%, payable semi-annually.
- Revolving Credit Facility: Refinanced to a total size of $2.56 billion, with $2.17 billion extended to January 2024.
- Cost of Debt: The average cost of debt is projected to reduce from 6.4% to 6.2%.
- Debt Maturity: The weighted average life of debt is extended from 6.1 years to 6.7 years (as of September 2018).
Material Changes and Refinancing Details
The Company is utilizing proceeds from the new offering and cash on hand to refinance existing obligations:
- Refinance $526.0 million of existing 8.625% Senior Notes due 2019.
- Refinance $905.3 million of existing 10.125% Senior Notes due 2023 at a redemption price of 107.594% plus accrued interest.
- Reduce the interest rate on the revolving credit facility from LIBOR + 325 bps to LIBOR + 225 bps.
Outlook, Management Commentary, and Risks
Management expects total annual interest cost savings of approximately $45 million resulting from these refinancing activities. The offering is expected to close on or about January 31, 2019, subject to customary closing conditions. The filing includes a standard disclaimer regarding forward-looking statements, noting that actual results may differ due to economic, business, competitive, and regulatory factors.
Investor Verification Checklist
- Confirm the closing of the $1.5 billion Notes offering and the $2.56 billion credit facility refinancing by January 31, 2019.
- Verify the actual redemption price paid for the 10.125% Senior Notes due 2023.
- Monitor the realization of the projected $45 million in annual interest savings.
- Review the impact of the extended debt maturity profile on future liquidity requirements.