Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Virgin Media Bristol LLC (the “US Borrower”) and Virgin Media SFA Finance Limited (the “Facility O Borrower”) have entered into the financing described below by way of additional facilities drawn under the senior facilities agreement originally dated June 7, 2013 as amended from time to time (the “Senior Facilities Agreement”). The US Borrower is an indirect wholly-owned subsidiary of Virgin Media Investment Holdings Limited (the “Company”) and the Facility O Borrower is a direct wholly-owned subsidiary of the Company. The Company is an indirect wholly-owned subsidiary of Virgin Media Inc., and Virgin Media Inc. is an indirect wholly-owned subsidiary of Liberty Global plc. The Company, together with other subsidiaries of Virgin Media Inc., is a party to the Senior Facilities Agreement.
On October 4, 2019, the Company, the US Borrower and The Bank of Nova Scotia as facility agent, among others, entered into a $3.3 billion additional facility accession deed (the “Facility N Accession Deed”) pursuant to the Senior Facilities Agreement. Under the terms of the Facility N Accession Deed, certain lenders have agreed to provide a $3.3 billion term loan facility (“Facility N”) to the US Borrower, which amounts are to be issued at 99.75% of par.
The final maturity date for Facility N will be January 31, 2028. Facility N will bear interest at a rate of LIBOR plus 2.50% per annum subject to a LIBOR floor of 0%. Facility N can be utilised by the US Borrower for its general corporate purposes and/or working capital purposes, including without limitation, the redemption, refinancing, repayment or prepayment of existing indebtedness of any member of the Bank Group (as defined in the Senior Facilities Agreement) and the payment of any fees and expenses in connection with Facility N or other transactions related thereto.
The net proceeds from Facility N together with existing cash, will be used to prepay in full Facility K (as defined in the additional K facility accession deed dated November 10, 2017 between, among others, the US Borrower and The Bank of Nova Scotia as facility agent) under the Senior Facilities Agreement and fees, costs and expenses related to such refinancing.
On October 4, 2019, the Company, the Facility O Borrower and The Bank of Nova Scotia as facility agent, among others, entered into a €750.0 million ($823.4 million at the October 4, 2019 exchange rate) additional facility accession deed (the “Facility O Accession Deed”) pursuant to the Senior Facilities Agreement. Under the terms of the Facility O Accession Deed, certain lenders have agreed to provide a €750.0 million term loan facility (“Facility O”) to the Facility O Borrower, which amounts are to be issued at 99.75% of par.
The final maturity date for Facility O will be January 31, 2029. Facility O will bear interest at a rate of EURIBOR plus 2.50% per annum subject to a EURIBOR floor of 0%. Facility O can be utilised by the Facility O Borrower for its general corporate purposes and/or working capital purposes, including without limitation, the redemption, refinancing, repayment or prepayment of existing indebtedness of any member of the Bank Group and the payment of any fees and expenses in connection with Facility O or other transactions related thereto.
The net proceeds from Facility O, together with certain other funds, will be used to redeem in full the £300.0 million 5.125% senior secured notes due 2025 and the $1.0 billion 5.250% senior secured notes due 2026 and fees, costs and expenses related to such redemptions.
The Facility N Accession Deed and the Facility O Accession Deed provide that the lenders under Facility N and Facility O (as applicable) consent to the amendments to the covenants and other provisions of the Senior Facilities Agreement and the Finance Documents (as defined in the Senior Facilities Agreement) outlined in the Facility N Accession Deed and the Facility O Accession Deed (as applicable) (including in the schedules thereto). Once the consent of the requisite lenders is obtained under the Senior Facilities Agreement, such amendments may be implemented at the election of the Company.
The foregoing descriptions of Facility N and Facility O and the transactions contemplated thereby are not complete and are subject to and qualified in their entirety by reference to the Facility N Accession Deed, a copy of which is attached hereto as Exhibit 4.1, and the Facility O Accession Deed, a copy of which is attached hereto as Exhibit 4.2.