Virgin Media unit wraps oversubscribed tender offer for 9½% notes

By Marisa Wong

Madison, Wis., March 27 - Virgin Media Inc. subsidiary Virgin Media Finance plc completed its tender offer for up to $500 million of its outstanding dollar-denominated 9½% senior notes due 2016.

As of 11:59 p.m. ET on March 26, the expiration of the tender offer, holders had tendered $853,213,000, or 63%, of the $1.35 billion of outstanding 9½% notes.

The subsidiary said it will purchase $499,998,000 of the notes on March 28. The tendered notes were accepted on a prorated basis because the amount tendered exceeded the offer cap.

As noted before, holders will receive a total consideration of $1,150, including an early tender premium of $30, per $1,000 principal amount of notes tendered by the early tender deadline, which was 5 p.m. ET on March 12.

Holders who tendered after the early deadline will receive a tender offer consideration equal to the total consideration less the early tender premium.

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

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. As previously reported, Virgin Media issued $500 million principal amount of 5¼% senior notes due 2022, the proceeds of which may be used to fund the tender offer.

The offer began on Feb. 28 and 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) were the dealer managers for the tender offer. Lucid Issuer Services Ltd. (virginmedia@lucid-is.com) was 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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