Virgin Media 2011 Annual Report Download - page 8

Financing
On February 15, 2011, we amended our senior credit facility to increase operational flexibility. On May 20,
2011, we entered into two new additional facilities under the senior credit facility. These consisted of 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 which, together with
£25 million of cash, was used to repay the loan balance from the previous term loan which consisted of a
£467.5 million Tranche A and £307.5 million Tranche B. The maturity date of the facilities remains as June 30,
2015. Further changes to the senior credit facility to increase operational flexibility were also effected on
May 27, 2011.
On March 3, 2011, our wholly owned subsidiary, Virgin Media Secured Finance PLC issued $500 million
aggregate principal amount of 5.25% senior secured notes due 2021 and £650 million aggregate principal amount
of 5.50% senior secured notes due 2021. Interest is payable on January 15 and July 15 each year, with the first
payment having begun on July 15, 2011. The senior secured notes due 2021 rank pari passu with and, subject to
certain exceptions, share in the same guarantees and security which have been granted in favor of our senior
credit facility and senior secured notes due 2018. We used the net proceeds to prepay £532.5 million of the then-
existing Tranche A outstanding under our previous senior credit facility, thus eliminating scheduled amortization
in 2011 through 2014, and £367.5 million of the then-existing Tranche B outstanding under our previous senior
credit facility that was scheduled for payment in 2015. The remainder of the proceeds were used for general
corporate purposes. On September 8, 2011, we completed an offer to exchange any and all of the then
outstanding senior secured notes due 2021 which we originally issued in a U.S. private placement, for an
equivalent amount of new senior secured notes due 2021 which have been registered under the U.S. Securities
Act of 1933, as amended.
On July 26, 2011, we redeemed in full the outstanding balance of our $550 million 9.125% senior notes due
2016 using £355.8 million of cash from our balance sheet. We recognized a loss on extinguishment of
£15.5 million as a result of this redemption.
For more information about our senior notes, senior secured notes and the senior credit facility, see
“Management’s Discussion and Analysis of Results of Operations and Financial Condition—Liquidity and
Capital Resources.”
Capital Structure Optimization
On July 28, 2010, we announced our intention to undertake a range of capital structure optimization actions,
including 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. During the first quarter of 2011, we increased the 2010 capital
structure optimization program to permit the full redemption of the $550 million 9.125% senior notes due 2016,
which occurred on July 26, 2011.
On July 27, 2011, we announced a new capital structure optimization program which includes the
application of, in aggregate, up to £850 million until December 31, 2012. This new program consists of the
application of up to £625 million in repurchases of our common stock and up to £225 million for transactions
relating to our debt and convertible debt, including related derivative transactions. Our capital structure
optimization programs may be effected through open market, privately negotiated, and/or derivative transactions,
and may be implemented through arrangements with one or more brokers. On October 27, 2011, we announced
our intention to expend up to a further £250 million on share repurchases by the end of 2012 from the proceeds of
the sale of UKTV in addition to the £625 million under the new capital structure optimization program. Any
shares of common stock acquired in connection with these programs will be held in treasury or cancelled.
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