Virgin Media 2010 Annual Report Download - page 122

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 8—Long Term Debt (continued)
The senior credit facility bears interest at LIBOR, plus a margin currently ranging from 2.75% to 3.75% and
the applicable cost of complying with any reserve requirement. The margins on £1,000.0 million of the term loan
A facilities and on the revolving credit facility ratchet range from 2.75% to 3.50% based on leverage ratios.
Interest is payable at least semi-annually. Principal repayments in respect of £1,000.0 million of the term loan A
facilities are due annually beginning in June 2011 and ending in June, 2015, and the remaining term loan B
facility is repayable in full on its maturity date which is December 31, 2015.
On April 19, 2010, we drew down an aggregate principal amount of £1,675.0 million under our new senior
credit facility dated March 16, 2010, as amended and restated, or the new senior credit facility, and applied the
proceeds towards the repayment of all amounts outstanding under our old senior credit facility and for general
corporate purposes.
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, 2010, we were in compliance with these
covenants.
The agreements governing the senior secured 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 at certain levels of leverage, 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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