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Virgin Hopes to Get Credit

Michael Harris
Michael Harris

11:10 AM -- Earlier this month, U.K. cable MSO Virgin Media Inc. (Nasdaq: VMED) informed investors it was making moves to avoid its own credit crisis. (See Virgin Seeks Debt Amendment.)

Virgin said it was “seeking the consent of its senior lenders to amendments to its senior facilities agreement which would, alongside other changes, roll back bank amortization payments owed to participating lenders to June 2012.” Those payments are in service of £4.3 billion ($7.5 billion) in loans, plus a £100 million ($174.8 million) revolving credit line.

Virgin said it had originally planned to find a new credit facility by mid-2009. However, given the global financial meltdown, the MSO decided it would be better not to count on it.

Later in the day, the Financial Times reported that Virgin is making progress:

According to FT:

Virgin Media said that it had the "unanimous support" of its 10 biggest bank lenders. They represent between 45 and 50 per cent of the £4.3bn in loans that the cable group has outstanding, according to people familiar with the structure of the debt.

The support puts Virgin close to winning the consent of two thirds of its lenders needed to change its credit agreement terms.

Other MSOs with their own credit concerns are undoubtedly watching closely.

— Michael Harris, Chief Analyst, Cable Digital News

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