► Transaction is part of larger financing framework to increase Net Total Debt/EBITDA
ratio[1] to approximately 3.5x 2011 EBITDA by end of 2011
► Will allow for prepayments of short-term maturities and future shareholder
disbursements, in absence of accretive acquisitions
Telenet Group Holding NV (\"Telenet\" or the \"Company\") announces a new issuance of \u0080350 million under its existing credit facility (the \"Senior Credit Facility\"). Following the recent voluntary debt exchange and extension process, this transaction is the next step in a further optimization of Telenet's capital structure. Telenet has defined a financing framework that will allow for attractive future shareholder disbursements, whilst maintaining flexibility to grow and invest in its business. In order to do so, Telenet intends to increase its Net Total Debt ratio to approximately 3.5x 2011 EBITDA by end of 2011.
The proceeds for the \u0080350 million issuance will be borrowed from Telenet Finance Luxembourg S.C.A. (the \"Lender\"), an independent financing company, who has announced the offer of \u0080350 million senior secured notes due 2020 (the \"Notes\") for this purpose. The Lender will enter into the Senior Credit Facility under an additional tranche with maturity in 2020.
The Notes issued by the Lender will be secured by a first-ranking security interest over all of the capital stock and bank account of the Lender and a first-ranking security interest over the Lender's rights as a lender under the Senior Credit Facility.
Telenet expects to use the proceeds of the loan to repay certain Term Loans with the shortest maturities under the Senior Credit Facility for an aggregate of up to \u0080200 million, and the remainder to on-lend to Telenet NV for general corporate purposes. These purposes may include future shareholder disbursements in 2011, in absence of potential value-accretive acquisitions. This transaction will further extend the average maturity profile of Telenet's debt and improve the stability of Telenet's debt capitalization by providing additional cash flow flexibility at very attractive market conditions.
As of September 30, 2010, Telenet carried a Net Total Debt ratio1 of 2.8x EBITDA. Telenet's debt is rated Ba3 (Moody's) and BB (Fitch).
Press release in attachment.
[1] Calculated as per Senior Credit Facility definition, using net total debt, excluding subordinated shareholder loans, capitalized elements of indebtedness under the clientele and annuity fees and any other finance leases, divided by last two quarters' annualized EBITDA.