Virgin Media hedges some convertibles, effectively upping strike price

By Angela McDaniels

Tacoma, Wash., Oct. 27 - Virgin Media Inc. executed conversion hedges that effectively increase the strike price of $900 million, or 90%, of its 6.5% convertible senior notes due 2016 to $35.00 from $19.22, according to the company's earnings release for the third quarter.

The hedges are meant to reduce future dilution. Assuming the convertibles are settled in stock and the stock price is $35.00 at conversion, the effect of this transaction would reduce the number of shares issued by the company by 21 million.

The company noted that the hedges do not change the terms of the convertibles from a noteholder's perspective, and they do not alter the conversion date of Nov. 15, 2016. Hedging 90% of the convertibles allows for a small proportion of noteholders who seek conversion prior to maturity.

Virgin Media is a U.K. entertainment and communications company with corporate headquarters in New York and operational headquarters in Hook, England.

© 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.