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March 21, 2005
Mail Stop 0407
Curtis S. Shaw, Esq.
Executive Vice President, General Counsel, and Secretary
Charter Communications, Inc.
12405 Powerscourt Drive
St. Louis, Missouri 63131
RE: Charter Communications, Inc.
Amendment No. 2 to Registration Statement on Form S-1
File No. 333-121136
Filed March 10, 2005
Dear Mr. Shaw:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
* * * * *
Amendment No. 2 to Form S-1 (333-121136)
1. We note your response to our prior comment #1. In particular,
we
note that some of the "Equity Investors" who will purchase the
Class
A shares in the current offering will be the 5.875% note holders.
We
further note some of these 5.875% note holders may purchase the
Class
A shares in order to close out short positions that were created
prior to the effectiveness of the Form S-1. Supplementally,
please
provide a reasonably-detailed analysis explaining why the use of
registered Class A shares to "close out" short positions created
prior to effectiveness should not be viewed as an improper pre-
effective sale of such shares. In this regard, please refer to
our
position as articulated in the July 1997 Telephone Interpretation
#A.65.
In addition, please provide us with a reasonably-detailed analysis
explaining why the Class A shares covered by the Form S-1 should
not
be viewed as having been offered to the 5.875% note holders at the
time of the Rule 144A offering, i.e. prior to the filing of the
Form
S-1, with Citigroup acting as an underwriter. In this regard, we
note that the availability of registered Class A shares to the
5.875%
note holders was necessary in order to sell the 5.875% notes at
favorable terms. We also note that some of the 5.875% note
holders
may purchase the registered Class A shares to close out their
hedged
positions. To facilitate our review, please provide us with
copies
of the offering memorandum, along with any other relevant sales
materials, used in connection with the Rule 144A offering of the
5.875% notes.
Finally, please provide us with a reasonably-detailed analysis
explaining why the negotiation and execution of the share lending
agreement should not be viewed as a pre-filing offer of Class A
shares to Citigroup.
2. Please provide us with a reasonably-detailed analysis
explaining
why the Rule 144A offering of 5.875% notes should not be
integrated
with the current registered offering of Class A shares for
purposes
of Section 5 of the Securities Act. Your analysis should explain
why
the offerings should not be integrated despite the following
points:
* the availability of registered Class A shares was crucial to
Charter`s ability to sell the 5.875% notes;
* both the Rule 144A offering and the current registered offering
of
Class A shares appear to be part of the same plan of financing and
serve the same general purpose; and
* at least some of the 5.875% note holders will be purchasers in
the
current registered offering of Class A shares.
3. We note from your response letter, dated January 31, 2005, that
Charter`s transaction is not being made in reliance on the October
9,
2003 Goldman Sachs interpretative letter. Please provide us with
a
reasonably-detailed analysis explaining why the Rule 144A offering
of
5.875% notes, the current registered offering of Class A shares,
and
the dynamic hedging activities by the 5.875% note holders should
not
be integrated for purposes of Section 5 of the Securities Act.
Identify the exemption from Securities Act registration that will
cover the dynamic hedging activities. In this regard, please note
that our position in the Goldman Sachs interpretative letter
regarding the availability of a Securities Act exemption for
dynamic
hedging is based on the premise that the issuer (or its agent)
would
have no economic interest or significant participation in the
dynamic
hedging. Your analysis should explain how Charter`s and
Citigroup`s
roles in facilitating the dynamic hedging by the 5.875% note
holders
are consistent with this position.
4. We note that the Equity Investors who lend shares to Citigroup
will receive a "standard lending fee." Supplementally, please
indicate the expected amount of this fee and explain who will pay
such fee to the Equity Investors.
5. Based on your supplemental responses regarding Citigroup`s
obligation to borrow and sell the registered shares, it appears
that
the underwriting arrangement for Charter`s offering is
functionally
similar to that of a best-efforts offering. If so, please revise
the
cover page to briefly describe the nature of Citigroup`s
underwriting
arrangement, as required by Item 501(b)(8)(ii) of Regulation S-K.
6. We have received your responses to our comments in our letter
dated February 28, 2005. We have passed along these responses to
the
Commission`s Office of the Chief Accountant, and we are still
considering your responses. We expect to provide you with further
comments shortly.
Risk Factors, page 9
The market price of our Class A common stock..., page 24
7. We note from the disclosure on page 14 that an additional $85
million worth of Class A common stock may be issued in the form of
stock or warrants as part of the settlement of certain Delaware
class
actions and derivative suits. We further note that the number of
shares issued will be determined by formulas set forth in the
settlement agreements. Please briefly describe how the formulas
will
work and whether the shares can be freely resold into the public
market. Describe any relevant risks faced by investors as a
result
of the issuances contemplated by the settlement agreements.
* * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Kathleen Kerrigan at (202) 942-1944 or
Carlos
Pacho at (202) 942-1876 if you have questions regarding comments
on
the financial statements and related matters. Please contact Ted
Yu
at (202) 824-5684 or me at (202) 942-1990 with any other
questions.
Sincerely,
Larry Spirgel
Assistant Director
Cc: Kevin L. Finch, Esq.
Irell & Manella LLP
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Charter Communications, Inc.
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