This is good news.....right?

[HDFootyMan]

http://www.bloomberg.com/news/2011-0...021-notes.html

Virgin Media Inc., the U.K.’s second-largest pay-television company, said it’s issuing the equivalent of 750 million pounds ($1.2 billion) of senior secured notes to repay some of its loans.

The 10-year bonds will be sold in a private placement and will rank pari passu with Virgin Media’s senior loans and its existing senior secured notes due 2018, the Hook, England-based company said in a statement.

Proceeds of the sale will be used to prepay approximately 533 million pounds of the A portion of Virgin Media’s senior credit facility, according to the statement. The remainder will be used to repay part of the B loan.

Virgin Media’s senior credit facility consists of an 800 million-pound A loan maturing in 2014, and a 675 million-pound B loan and new 200 million-pound A loan expiring in 2015, according to data compiled by Bloomberg. There is also a 250 million-pound revolving credit which matures in 2015, data show.

Yes - they are paying off old expensive debt with lower cost funds.

[Jonnymeg]

Yes, i think so.
I think it means that they issue bonds and pay interest on those bonds to the purchaser over the ten year period.
The money the rake in from these bonds will go to pay off bank loans that have greater rates and covenants attached to them.
So whilst they are still in debt they are reducing their interest payments and giving them greater flexibility.

Correct me pls if i am wrong.

[weesteev]

Originally Posted by Jonnymeg

Yes, i think so.
I think it means that they issue bonds and pay interest on those bonds to the purchaser over the ten year period.
The money the rake in from these bonds will go to pay off bank loans that have greater rates and covenants attached to them.
So whilst they are still in debt they are reducing their interest payments and giving them greater flexibility.

Correct me pls if i am wrong.

You are totally correct. This is great news, but not unexpected especially after the Q4 results recently.

[Marcus125]

Originally Posted by weesteev

You are totally correct. This is great news, but not unexpected especially after the Q4 results recently.

Yep after this they will only be 5 billion pound in debt. THE FUTURES BRIGHT.

[weesteev]

Originally Posted by Marcus125

Yep after this they will only be 5 billion pound in debt. THE FUTURES BRIGHT.

Compared to $20bn when NTL entered chapter 11 this is great news! Not forgetting Telewest's seperate debt load... The future is a lot brighter than it used to be. There is a solid plan in place for debt repayment which has been met every year since Virgin Media was born.

Originally Posted by Marcus125

Yep after this they will only be 5 billion pound in debt. THE FUTURES BRIGHT.

You forgot to mention that BSkyB have a billion pounds net debt at the 6 months ending Dec 10 (down from 1.7 billion pounds the same time last year).