Virgin Media 2008 Annual Report Download - page 187

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 8—Long Term Debt (Continued)
to June 2012 and reset certain financial covenant ratios. These changes will only become effective after
we have made certain principal repayments under the senior credit facility totaling £487.0 million, of
which £300.0 million was paid in December 2008. We have until August 10, 2009, subject to exercising a
three-month extension option, to satisfy the £187.0 million remaining under the repayment condition.
As part of the amendments, certain lenders have received a margin increase of 1.50% and, subject
to the repayment condition, certain other lenders will receive a margin increase of 1.375%. We have
paid fees of £49.2 million in 2008 in connection with the amendments and will pay up to an additional
£13.0 million in fees upon satisfaction of the repayment condition. The amendments also, among other
things, suspended the right of certain lenders to receive a pro rata share of prepayments.
The facility is secured through a guarantee from Virgin Media Finance PLC. In addition, the bulk
of the facility is secured through guarantees and first priority pledges of the shares and assets of
substantially all of our operating subsidiaries and of receivables arising under any intercompany loans
to those subsidiaries. We are subject to financial maintenance tests under the facility, including a test of
liquidity, coverage and leverage ratios applied to us and certain of our subsidiaries. As of December 31,
2008, we were in compliance with these covenants.
The agreements governing the senior notes and the senior credit facility significantly, and, in some
cases, absolutely restrict our ability and the ability of most of our subsidiaries to:
• incur or guarantee additional indebtedness;
• pay dividends or make other distributions, or redeem or repurchase equity interests or
subordinated obligations;
• make investments;
• sell assets, including the capital stock of subsidiaries;
• enter into sale and leaseback transactions or certain vendor financing arrangements;
• create liens;
• enter into agreements that restrict the restricted subsidiaries’ ability to pay dividends, transfer
assets or make intercompany loans;
• merge or consolidate or transfer all or substantially all of our assets; and
• enter into transactions with affiliates.
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