Virgin Media kicks off £2.45 billion equivalent secured notes offering in three tranches

By Paul A. Harris

Portland, Ore., Sept. 8 – Virgin Media plans to price £2.45 billion equivalent of senior secured notes (expected ratings Ba3/BB-/BB+) in three tranches during the Sept. 7 week, according to market sources.

The deal features 8.3-year sterling-denominated notes with 3.3 years of call protection. Initial talk is in the low 4% area. Lead bookrunner Citigroup will bill and deliver. Goldman Sachs and HSBC are also lead bookrunners.

There will be a euro-denominated tranche of 10.3-year notes with 5.3 years of call protection. Initial talk is in the low-to-mid 3% area. Lead bookrunner Citigroup will bill and deliver. Credit Suisse and Morgan Stanley are also lead bookrunners.

In addition, a dollar-denominated tranche of 10.3-year notes with 5.3 years of call protection has initial talk in the low 4% area. BofA is the lead bookrunner.

Tranche sizes remain to be determined.

Barclays, BBVA, BNP Paribas, Credit Agricole, Deutsche Bank, JPMorgan, Lloyds, NatWest, RBC, Santander and SG are joint bookrunners for all three tranches.

The Rule 144A and Regulation S for life deal was scheduled to kick off on a Tuesday conference call with investors.

The United Kingdom-based telecom plans to use the proceeds for general corporate purposes, including payment of any distributions at closing of a joint venture between Liberty Global and Telefonica, among others. Proceeds will be escrowed until completion, with a special mandatory redemption if the joint venture does not close.

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