Virgin Media 2010 Annual Report Download - page 46

The Senior Secured Notes rank pari passu with our senior credit facility and, subject to certain exceptions,
share in the same guarantees and security as granted in favor of our senior credit facility. For more information
about our Senior Secured Notes, see “Management’s Discussion and Analysis of Results of Operations and
Financial Condition—Liquidity and Capital Resources—Senior Secured Notes.”
On March 16, 2010, we entered into a senior credit facility with lenders under which the lenders agreed to
make available to certain subsidiaries of the Company a term loan A facility, or Tranche A, and a revolving
credit facility, or the RCF. On April 12, 2010, a term loan B facility, or Tranche B, was added to the senior credit
facility by way of an accession deed between Virgin Media Investment Holdings Limited and Deutsche Bank
AG, London Branch. Tranche B has been syndicated to a group of lenders. On April 19, 2010, we drew down an
aggregate principal amount of £1,675 million under the senior credit facility and applied the proceeds towards
the repayment in full of all amounts outstanding under our old senior credit facility dated March 3, 2006 (as
amended and restated from time to time) as at the draw down date. On February 15, 2011, we further amended
our senior credit facility to increase operational flexibility.
On August 5, 2010, we completed an offer to exchange any and all of the then outstanding senior secured
notes due 2018, which we originally issued in a U.S. private placement, for an equivalent amount of new senior
secured notes due 2018 which have been registered under the U.S. Securities Act of 1933, as amended. In
connection with this offer, we exchanged a total of $999,369,000 aggregate principal amount, or 99.9% of the
original U.S. dollar denominated notes, and £867,373,000 aggregate principal amount, or 99.1% of the original
sterling denominated notes, for an equivalent amount of newly issued senior secured notes due 2018. Holders of
the original senior secured notes due 2018 who did not tender their notes in compliance with the offer terms will
remain subject to restrictions on transfer of these notes. Completion of the exchange offer satisfied our
obligations in full under a registration rights agreement entered into in connection with the original note issuance
in January 2010. We did not receive any additional proceeds from the exchange offer. For further details relating
to the exchange offer, please see Amendment No.1 to the Registration Statement on Form S-4 of Virgin Media
Inc., as filed with the SEC on June 30, 2010.
Capital Structure Optimization
On July 28, 2010, we announced our intention to undertake a range of capital structure optimization actions.
This capital structure optimization program is expected to include the application of, in aggregate, up to
£700 million, in part towards repurchases of up to £375 million of our common stock until August 2011 and in
part towards transactions relating to our debt and convertible debt, including related derivative transactions and
the conversion hedges described below.
On October 27, 2010, we executed conversion hedges with several hedge counterparties relating to our
$1.0 billion aggregate principal amount of 6.50% convertible senior notes due 2016, issued pursuant to an
indenture dated as of April 16, 2008. These transactions relate to 90% of the aggregate principal amount of the
convertible senior notes and are intended to offset a portion of the dilutive effects that would potentially be
associated with conversion of the convertible senior notes at maturity, by raising the stock price at which we
could incur economic dilution from $19.22 per share, the initial conversion price of the convertible senior notes,
to $35.00 per share.
During the year ended December 31, 2010, we repurchased approximately 9.3 million shares of common
stock, at an average purchase price per share of $20.78 through the accelerated stock repurchase program
mentioned above for an aggregate purchase price of $194 million (or £122.5 million), and 2.3 million shares of
common stock, at an average purchase price per share of $26.82 through an open market repurchase program for
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