Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, Altice USA, Inc. ("Altice USA") has agreed to sell
49.99% of its Lightpath fiber enterprise business to Morgan Stanley
Infrastructure Partners (the "MS Investment"). Following the MS Investment,
Altice USA will retain a 50.01% interest in the Lightpath business, which will
remain consolidated in Altice USA's financial results.
In connection with the MS Investment, which is currently expected to close in
the fourth quarter of 2020 (subject to customary closing conditions, including
regulatory approvals), Cablevision Lightpath LLC (the "Issuer"), an indirect,
wholly owned subsidiary of Altice USA, has entered into a Senior Notes
Indenture, Senior Secured Notes Indenture and Credit Agreement (each as defined
and described in further detail below). The gross proceeds of the offering of
the Senior Notes and Senior Secured Notes (each as defined and described in
further detail below) have been deposited into escrow pending the consummation
of the MS Investment. In addition, the Borrower (as defined below) does not
expect to draw upon the Term Loan Facility (as defined below) until the
consummation of the MS Investment.
Upon closing of the MS Investment, the Issuer and its subsidiaries will not
guarantee or otherwise be obligated in respect of the existing CSC Holdings, LLC
debt silo. Prior to the date hereof, Lightpath Holdings LLC, the parent company
of the Issuer, the Issuer and the Issuer's subsidiaries were designated as
unrestricted subsidiaries under CSC Holdings, LLC's debt silo.
Issuance of Senior Notes
On September 29, 2020, the Issuer issued $415.0 million aggregate principal
amount of its 5.625% senior notes due 2028 (the "Senior Notes") in a private
placement conducted pursuant to Rule 144A and Regulation S under the Securities
Act of 1933, as amended (the "Securities Act"). The Senior Notes are unsecured
obligations of the Issuer. The Senior Notes were issued pursuant to an
indenture, dated as of September 29, 2020 (the "Senior Notes Indenture"),
between the Issuer and Deutsche Bank Trust Company Americas, as trustee. The
Senior Notes will bear interest at a rate of 5.625% and will pay interest
semi-annually in arrears on March 15 and September 15 of each year, beginning on
March 15, 2021. The Senior Notes will mature on September 15, 2028.
Subject to certain conditions, the Issuer may, at its option, redeem up to 40%
of the original principal amount of the Senior Notes at any time prior to
September 15, 2023 with the net cash proceeds of certain equity issuances at a
price equal to 105.625% of the principal amount of the Senior Notes redeemed,
plus accrued and unpaid interest to, but excluding, the date of redemption. In
addition, at any time prior to September 15, 2023, the Issuer may redeem the
Senior Notes in whole or in part, at its option, at a redemption price equal to
100% of the principal amount of the Senior Notes redeemed, plus the relevant
Applicable Premium (as defined in the Senior Notes Indenture), plus accrued and
unpaid interest, if any, to, but excluding, the date of redemption. On and after
September 15, 2023 the Issuer may redeem the Senior Notes in whole or in part,
at its option, at the redemption prices set forth below (expressed as a
percentage of the principal amount of the Senior Notes to be redeemed), plus
accrued and unpaid interest to, but excluding, the date of redemption if
redeemed during the 12-month period beginning on September 15 of each of the
years indicated below:
Year Percentage
2023 102.813 %
2024 101.406 %
2025 100.000 %
Pending the consummation of the MS Investment, the gross proceeds of the
offering of the Senior Notes have been deposited into segregated escrow
accounts.
The foregoing description of the Senior Notes Indenture governing the Senior
Notes is qualified in its entirety by reference to the Senior Notes Indenture, a
copy of which is filed as Exhibit 4.1 to this Current Report on Form 8-K and
incorporated herein by reference.
Issuance of Senior Secured Notes
On September 29, 2020, the Issuer issued $450.0 million aggregate principal
amount of its 3.875% senior secured notes due 2027 (the "Senior Secured Notes")
in a private placement conducted pursuant to Rule 144A and Regulation S under
the Securities Act. The Senior Secured Notes were issued pursuant to an
indenture, dated as of September 29, 2020 (the "Senior Secured Notes
Indenture"), between the Issuer and Deutsche Bank Trust Company Americas, as
trustee. The Senior Secured Notes will bear interest at a rate of 3.875% and
will pay interest semi-annually in arrears on March 15 and September 15 of each
year, beginning on March 15, 2021. The Senior Secured Notes will mature on
September 15, 2027.
Subject to certain conditions, the Issuer may, at its option, redeem up to 40%
of the original principal amount of the Senior Secured Notes at any time prior
to September 15, 2023 with the net cash proceeds of certain equity issuances at
a price equal to 103.875% of the principal amount of the Senior Secured Notes
redeemed, plus accrued and unpaid interest to, but excluding, the date of
redemption. In addition, at any time prior to September 15, 2023, the Issuer may
redeem the Senior Secured Notes in whole or in part, at its option, at a
redemption price equal to 100% of the principal amount of the Senior Secured
Notes redeemed, plus the relevant Applicable Premimum (as defined in the Senior
Secured Notes Indenture), plus accrued and unpaid interest to, but not
including, the applicable redemption date. On and after September 15, 2023, the
Issuer may redeem the Senior Secured Notes in whole or in part, at its option,
at the redemption prices set forth below (expressed as a percentage of the
principal amount of the Senior Secured Notes to be redeemed), plus accrued and
unpaid interest to, but excluding, the date of redemption if redeemed during the
12-month period beginning on September 15 of each of the years indicated below:
Year Percentage
2023 101.938 %
2024 100.969 %
2025 100.000 %
Pending the consummation of the MS Investment, the gross proceeds of the
offering of the Senior Secured Notes have been deposited into segregated escrow
accounts.
The foregoing description of the Senior Secured Notes Indenture governing the
Senior Secured Notes is qualified in its entirety by reference to the Senior
Secured Notes Indenture, a copy of which is filed as Exhibit 4.2 to this Current
Report on Form 8-K and incorporated herein by reference.
Credit Agreement
On September 29, 2020, Cablevision Lightpath LLC, as borrower (the "Borrower"),
an indirect, wholly-owned subsidiary of Altice USA, entered into a credit
agreement, between, among others, the Borrower, the Lenders (as defined therein)
party thereto, Goldman Sachs Bank USA as administrative agent and Deutsche Bank
Trust Company Americas as collateral agent (the "Credit Agreement"). The Credit
Agreement provides for, among other things, (i) a U.S. dollar-denominated term
loan in an aggregate principal amount of $600.0 million (the "Term Loan
Facility"), which will be available in a single drawing and (ii) a U.S.
dollar-denominated revolving loan commitment in an aggregate principal amount of
$100.0 million (the "Revolving Credit Facility," and together with the Term Loan
Facility, the "Senior Secured Credit Facilities").
The loans made pursuant to the Senior Secured Credit Facilities may be comprised
of eurodollar borrowings or alternative base rate borrowings, and will bear
interest at a rate per annum equal to the adjusted LIBOR rate or the alternate
base rate, as applicable, plus the applicable margin, where the applicable
margin is (i) with respect to any alternate base rate loan, 2.25% per annum and
(ii) with respect to any eurodollar loan, 3.25% per annum. The maturity date of
the (i) Term Loan Facility is expected to be on the seventh anniversary of the
first date on which funds are drawn under the Term Loan Facility and (ii)
Revolving Credit Facility is expected to be on the fifth anniversary of the
first date on which funds are drawn under the Revolving Credit Facility.
The Borrower does not expect to draw upon the Term Loan Facility until the
consummation of the MS Investment. To the extent the Term Loan Facility is not
drawn upon substantially concurrent with the consummation of the MS Investment,
the proceeds of the Term Loan Facility will be deposited into segregated escrow
accounts.
The foregoing summary of the terms of the Credit Agreement does not purport to
be complete and is qualified in its entirety by reference to the Credit
Agreement, a copy of which is attached as Exhibit 4.3 to this Current Report on
Form 8-K and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 of this Current Report on Form
8-K is incorporated herein by reference into this Item 2.03.
Disclaimer on Forward-looking Statements
This current report on Form 8-K contains forward-looking statements.
Forward-looking statements relate to future events, including the consummation
of the MS Investment and the expected timing thereof, the release from escrow of
the proceeds of the offering of the Senior Notes and Senior Secured Notes and
the drawdown of funds under the Term Loan Facility, as well as anticipated
results of operations, business strategies, and other aspects of our operations
or operating results. In many cases you can identify forward-looking statements
by terminology such as "anticipate," "intend," "project," "estimate,"
"continue," "potential," "should," "could," "may," "will," "objective,"
"guidance," "outlook," "effort," "expect," "believe," "predict," "budget,"
"projection," "goal," "plan," "forecast," "target" or similar words. Statements
may be forward looking even in the absence of these particular words. Where, in
any forward-looking statement, Altice USA expresses an expectation or belief as
to future results, such expectation or belief is expressed in good faith and
believed to have a reasonable basis. However, there can be no assurance that
such expectation or belief will result or be achieved. The actual results of
operations can and will be affected by a variety of risks and other matters.
Other factors that could cause actual results to differ materially from those
described in the forward-looking statements include other economic, business,
competitive and/or regulatory factors affecting our business generally as set
forth in our filings with the Securities and Exchange Commission. Unless legally
required, Altice USA undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
4.1 Senior Notes Indenture, dated as of September 29, 2020 between
Cablevision Lightpath LLC, as Issuer, and Deutsche Bank Trust Company
Americas, as trustee.
4.2 Senior Secured Notes Indenture, dated as of September 29, 2020
between Cablevision Lightpath LLC, as Borrower, and Deutsche Bank
Trust Company Americas, as trustee.
4.3 Credit Agreement, dated as of September 29, 2020 between Cablevision
Lightpath LLC, as Borrower, the Lenders party thereto, Goldman Sachs
Bank USA as administrative agent and Deutsche Bank Trust Company
Americas as collateral agent.
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ALTICE USA, INC. 
