Virgin Media begins tender offers for 9½%, 8 3/8%, 8 7/8% notes

By Angela McDaniels

Tacoma, Wash., Oct. 10 - Virgin Media Inc. subsidiary Virgin Media Finance plc began two tender offers for four series of notes, according to a company news release.

In the first offer, the company is offering to purchase any and all of its $850 million of 9½% senior notes due 2016 and €180 million of 9½% senior notes due 2016. In the second offer, it will purchase up to $500 million principal amount of its $600 million of 8 3/8% senior notes due 2019 and £350 million of 8 7/8% senior notes due 2019.

If the principal amount of notes due 2019 tendered exceeds the limit, then the notes purchased will be prorated, with the sterling-denominated notes converted into dollars at the applicable exchange rate.

The company is offering 111.67% of par for the dollar-denominated 9½% notes, 111.83% of par for the euro-denominated 9½% notes and 116.00% of par for the 8 3/8% notes and 8 7/8% notes. Each of these prices includes an early tender premium equal to 3% of par for notes tendered by the early tender deadline, 11:59 p.m. ET on Oct. 23.

The company will also pay accrued interest up to but excluding the settlement date.

Holders who tender their 9½% notes by the early tender date will receive payment on the early settlement date, which is expected to be no earlier than Oct. 30 and depends on when the offer conditions are met. The settlement date for the remaining notes is expected to be Nov. 7.

Holders cannot tender all of their notes; they must continue to hold at least $100,000, £50,000 or €50,000 of the notes, as applicable, once the offers are completed.

The offers will expire at 11:59 p.m. ET on Nov. 6.

The company plans to cancel and retire all of the notes purchased in the tender offer and to redeem all 9½% notes not tendered. The 9½% notes have a make-whole call option at Treasuries plus 50 basis points.

The tender offers are subject to a financing condition requiring Virgin Media or one of its subsidiaries to complete an offering of debt securities, a loan or other financing transaction that raises enough proceeds to pay for the tendered notes.

Neither of the tender offers is conditioned on the successful completion of the other.

The tender offers are part of Virgin Media's £225 million second-phase capital return program announced in July 2011, of which £175 million remains available. Virgin Media said the purpose of the tender offers is to allow it to lower its interest cost and enhance its capital structure by further extending its amortization schedule. The ongoing share buyback program is still in place and unaffected.

The dealer managers are J.P. Morgan Securities LLC (800 245-8812 or 212 834-2046), J.P. Morgan Securities plc (44 020 7134 3166), RBS Securities Inc. (877 297-9832 or 203 897-4825) and Royal Bank of Scotland plc (44 020 7085 4634 or liabilitymanagement@rbs.com). Lucid Issuer Services Ltd. (44 20 7704 0880 or virginmedia@lucid-is.com) is the information and tender agent.

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

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