Virgin Media to price $1 billion eight-year convertibles to yield 6.5%-7%, up 47.5%-52.5%

By Rebecca Melvin

New York, April 9 - Virgin Media Inc. plans to price $1 billion of eight-year convertible senior notes after the close on Thursday, according to a market source.

The Rule 144A deal, being sold via bookrunners Goldman Sachs and Deutsche Bank, was being talked to yield 6.5% to 7% with an initial conversion premium of 47.5% to 52.5%.

There is an option to purchase up to $150 million of additional notes.

The notes are non-callable, and there are no puts. There is contingent conversion, subject to a 120% hurdle, and net-share settlement at the company's option.

Virgin Media intends to use proceeds combined with existing cash reserves to prepay a portion of its outstanding A and B loans under its senior credit facilities.

Virgin Media expects to prepay about £261 million of the A tranche currently scheduled for payment in September 2009 and about £243 million of the B tranche currently scheduled for repayment in September 2012.

New York-based Virgin Media provides television, broadband, fixed-line telephone, and mobile telephone services in the United Kingdom.

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