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Virgin Media starts tender offer for up to $500 million 9½% notes
By Angela McDaniels
Tacoma, Wash., Feb. 28 - Virgin Media Inc. subsidiary Virgin Media Finance plc will purchase up to $500 million principal amount of its $1.35 billion dollar-denominated 9½% senior notes due 2016 through a tender offer, according to a company news release.
The company is not making an offer for any of its euro-denominated 9½% senior notes due 2016.
The company is offering $1,150 per $1,000 principal amount of notes plus accrued interest up to but excluding the settlement date. This includes an early tender premium of $30 for each note tendered by the early tender deadline, 5 p.m. ET on March 12.
The offer will expire at 11:59 p.m. ET on March 26.
Holders cannot tender all of their notes; they must continue to hold at least $100,000 of the notes once the offer is completed.
If holders tender more than $500 million of notes, then the notes will be accepted for purchase on a prorated basis.
The company expects to use cash on hand, drawings under its revolving credit facility and/or funds raised in the debt or loan markets to fund the purchase of the notes.
In a separate news release, the company announced plans to price $400 million of senior notes due 2022.
The company plans to cancel and retire all of the notes purchased in the tender offer.
The tender offer is part of Virgin Media's £225 million second-phase capital return program announced in July 2011. Virgin Media said the purpose of the tender offer is to allow it to lower its interest cost and "further enhance its capital structure." The ongoing share buyback program, of which £453 million was outstanding at the start of 2012, is still in place and unaffected.
Deutsche Bank Securities Inc. (212 250-7527 or 855 287-1922) and Goldman Sachs & Co. (212 357-4692 or 800 828-3182) are the dealer managers for the tender offer. Lucid Issuer Services Ltd. (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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