Virgin Media 2009 Annual Report Download - page 124

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 8—Long Term Debt (Continued)
facilities are repayable in full on their maturity dates, which are September 3, 2012 and March 3, 2013.
We are also required to make principal repayments out of excess cash flows if certain criteria are met.
On November 10, 2008, we amended our senior credit facility. Among other things, this
amendment allowed us to defer over 70.3% of the remaining principal payments due in 2010 and 2011
to June 2012, extend the maturity of over 72.3% of the existing revolving facility from March 2011 to
June 2012 and reset certain financial covenant ratios. These changes became effective in June 2009
following our satisfaction of the repayment condition under the senior credit facility. Upon satisfaction
of the repayment condition, the applicable interest margin in respect of the principal amounts that
were deferred and the extended revolving facility also increased by 1.375%, and we were required to
pay £11.5 million in fees.
The facility is secured through a guarantee from Virgin Media Finance. In addition, the bulk of
the facility is secured through guarantees and first priority pledges of the shares and assets of
substantially all of the operating subsidiaries of VMIH, 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, 2009, we were in compliance with these covenants.
The agreements governing the senior notes and the senior credit facility significantly restrict the
ability of our subsidiaries to transfer funds to us in the form of cash dividends, loans or advances. In
addition, the agreements 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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