Virgin Media 2011 Annual Report Download - page 116

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 7—Long Term Debt (continued)
In March 2011, we used the net proceeds from our senior secured notes due 2021 to prepay £532.5 million
of the Tranche A outstanding under our senior credit facility, thus eliminating scheduled amortization in 2011
through 2014, and £367.5 million of the Tranche B outstanding under our senior credit facility that was
scheduled for payment in 2015, with the remainder of the proceeds being used for general corporate purposes.
On May 20, 2011, we entered into two new additional facilities under the senior credit facility, comprising
an additional revolving facility with total commitments of £450 million, which replaced the previous
£250 million revolving facility, and an additional term facility with commitments of £750 million. We used the
new term facility of £750 million and £25 million of cash to repay the loan balance from the previous term loan
which was comprised of a £467.5 million Tranche A and £307.5 million Tranche B. The maturity date of the
facilities remains at June 30, 2015. Further changes to the senior credit facility to increase operational flexibility
were also effected on May 27, 2011.
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, 2011, 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;
• 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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