UPC Distribution seeks €750 million term loan E, amendments to existing loans

By Sara Rosenberg

New York, June 10 - UnitedGlobalCom Inc.'s wholly owned European cable television operation UPC Distribution Holding BV is seeking a new €750 million term loan E due July 1, 2009. The company also wants to amend its D loan and existing credit agreement.

Interest on the E loan is expected at Libor plus 300 basis points if senior debt to annualized EBITDA is 3.5-to-1 or more and Libor plus 275 basis points if senior debt to annualized EBITDA is less than 3.5-to-1, according to an 8-K filed with the Securities and Exchange Commission.

The new term loan E will be used to permanently prepay and cancel part of the B loan under the existing €3.5 billion secured facility agreement, repay part of the A facility, repay the $101 million UPC Polska note issued in connection with the UPC Polska restructuring, to finance additional permitted acquisitions and to permanently prepay and cancel any other facilities, provided that facilities B, C and D have been permanently prepaid and canceled in full.

The company also plans to use up to €450 million of its cash on hand to facilitate the refinancing of the more expensive debt under the existing bank facility.

There was about €3 billion outstanding under the existing A, B and C credit facilities as of March 31. UPC Distribution also is party to a €1.072 billion senior secured D loan, which is undrawn. Interest rates under the credit facilities range from Libor plus 225 to 550 basis points.

Proposed amendments to the existing credit facility include modifying financial covenant levels to allow a variance of 15% to 20% to projections, changing the senior-debt-to-annualized-EBITDA ratio at which excess cash flow is required to be applied in prepayment of the facilities to 4-to-1 from 3.5-to-1, and allowing for additional facilities to be applied toward the repayment of the A loan under certain conditions.

Other amendments include allowing for additional debt including raising €20 million working capital and guarantee facilities, removal of the cap of €0 in relation to connected acquisitions and of the €1 billion acquisition basket for additional permitted acquisitions, carve out to enable interest to be paid on subordinated shareholder loans to service all or any interest due in respect of the €500 million convertible notes issued by UGC in April, carve out to permit repayment of a maximum principal amount of €26 million of the subordinated shareholder loan between UPC Holding as lender and UPC Distribution as borrower and permitting hedging relating to the management of currency exchange risk by any obligor.

UnitedGlobalCom is a Denver-based broadband communications provider.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.