Virgin Media 2012 Annual Report Download - page 60

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The other principal terms of our senior credit facilities are set out below, although as a summary this does not purport
to be complete and is qualified in its entirety by reference to the full text of the SFA which is filed as Exhibit 10.1 in
Virgin Media Inc.’s current report on Form 8-K, as filed with the SEC on May 23, 2011, and is incorporated herein by
reference.
Bank group: comprises VMIH and certain of its subsidiaries, and certain other operating companies which are
subsidiaries of Virgin Media Inc. but not of VMIH.
Guarantees: Members of the bank group generating not less than 80% of consolidated operating cash flow
(a non-GAAP measure defined in the SFA) guarantee all sums payable under the Senior Credit Facility, and
have granted first ranking security over all or substantially all of their assets to provide such a guarantee.
Financial Maintenance Covenants: are measured quarterly based on operating cashflows which is a non-
GAAP measure defined in the SFA. As of December 31, 2012, we were in compliance with these covenants:
• Leverage ratio: consolidated net debt to consolidated operating cashflows to be a maximum of 3.75.
• Interest cover: consolidated operating cashflow to consolidated total net cash interest to be a minimum
of 3.10 at Dec 31, 2012 increasing in quarterly steps to a minimum of 4.00 at June 30, 2015.
Maturity: Both facilities are repayable in full at maturity on June 30, 2015 and have no scheduled amortization.
Change in control: A change in control will trigger the repayment of our senior credit facility and cancellation
of all commitments.
Restrictions: The SFA restricts the ability of members of the bank group to, among other things, make changes
to assets, incur or guarantee further liabilities, or make distributions from within that group.
Events of default: The Senior Credit Facility is immediately repayable on occurrence of events of default
specified in the SFA which include, among other things, failure to make payments when due, breaches of
terms of the SFA, illegality, or the occurrence of events which materially affect the ability of the obligors (taken
together) to comply with the SFA.
Convertible Senior Notes
Our $1 billion of convertible senior notes due 2016 bear interest at an annual rate payable semi-annually on May 15
and November 15 of each year, are unsecured senior obligations of Virgin Media Inc, and may not be redeemed by
us prior to maturity on November 15, 2016.
Holders of convertible senior notes may tender their notes for conversion any time on or after August 15, 2016 through
to the second scheduled trading date preceding maturity date. Prior to August 15, 2016, notes may be tendered by
the holder if:
(i) in any quarter, if the closing sale price of Virgin Media Inc.’s common stock during at least 20 of the last 30
trading days of the prior quarter was more than 120% of the applicable conversion price per share of
common stock on the last day of such prior quarter;
(ii) if, for five consecutive trading days, the trading price per $1,000 principal amount of notes was less than
98% of the product of the closing price of our common stock and the then applicable conversion rate;
(iii) if a specified corporate event occurs, such as a merger, recapitalization, reclassification, binding share
exchange or conveyance of all, or substantially all, of Virgin Media Inc.’s assets;
(iv) the declaration by Virgin Media Inc. of the distribution of certain rights, warrants, assets or debt securities
to all, or substantially all, holders of Virgin Media Inc.’s common stock; or
(v) if Virgin Media Inc. undergoes a fundamental change (as defined in the indenture governing the convertible
senior notes), such as a change in control, merger, consolidation, dissolution or delisting.
Upon conversion, we may elect to settle in cash, shares of common stock or a combination of cash and shares of our
common stock, except in the case of (v) above where holders may require us to settle in cash. The initial conversion
rate represents an initial conversion price of approximately $19.22 per share, which may be adjusted if this price
exceeds market values.
We have entered into conversion hedges which are intended to offset a portion of the dilutive effects that could
potentially be associated with conversion of the convertible senior notes at maturity and provide us with the option
to receive the number of shares of our common stock (or in certain circumstances cash) with a value equal to the
excess of (a) the value owed by us (up to the cap price of $35.00 per share) to convertible senior note investors
pursuant to the terms of the notes on conversion of up to 90% of the notes over (b) the aggregate face amount of
such converted notes upon maturity of the convertible senior notes.
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