Virgin Media Sets Pricing of Senior Notes Due 2019

Virgin Media Inc., a UK entertainment and communications business, announced the pricing of the offering of approximately GBP715 million equivalent aggregate principal amount of senior notes due 2019, split into a $600 million U.S. dollar denominated tranche and a GBP350 million sterling denominated tranche, of its subsidiary Virgin Media Finance PLC.

The notes will be guaranteed on a senior basis by Virgin Media Inc. and the intermediate holding companies of Virgin Media Finance PLC and on a senior subordinated basis by Virgin Media Investment Holdings Limited, the main borrower under Virgin Media's senior credit facilities. The notes will rank pari passu with Virgin Media Finance's outstanding senior notes due in 2014 and 2016. The sale of the notes is expected to close on November 9, subject to satisfaction of customary closing conditions.

The dollar denominated notes will bear interest at a rate of 8.375 percent per annum and the sterling denominated notes will bear interest at a rate of 8.875 percent per annum. Interest on each series of notes will be payable in cash semi-annually in arrears, beginning on April 15, 2010. Both series of notes will mature on October 15, 2019.

The issue price of the dollar denominated notes is 98.364 percent of the principal amount and the issue price of the sterling denominated notes is 98.401 percent of the principal amount. The net proceeds from the offering, taking into account fees, expenses and a deferred fee, are estimated to be approximately GBP689.4 million, based on a $/GBP exchange rate of $1.6479 on October 30.

Virgin Media said it intends to use these net proceeds to redeem a portion of the outstanding senior notes due 2014 of Virgin Media Finance PLC. Those notes were issued in April 2004, will mature on April 15, 2014 and comprise U.S. dollar denominated 8.75 percent senior notes due 2014 with a principal amount outstanding of $425 million, sterling denominated 9.75 percent senior notes due 2014 with a principal amount outstanding of GBP375 million, and euro denominated 8.75 percent senior notes due with a principal amount outstanding of EUR225 million.

The current redemption price is 104.375 percent of the principal amount of the dollar denominated notes and the euro denominated notes and 104.875 percent of the principal amount of the sterling denominated notes. Virgin Media expects to send a notice of redemption to the holders of the senior notes due 2014 shortly after the completion of this offering. Virgin Media currently expects to repay the remaining outstanding senior notes due 2014 in the future with cash from its balance sheet, supplemented further by cash flow from operations, subject to obtaining consent from its senior lenders.

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