Liberty Global PLC (LBTYA) filed a Form 8K - Direct or
off-Balance Sheet Financial Obligation - with the U.S Securities
and Exchange Commission on January 21, 2015.
Overview
As more fully described below, on January 21, 2015, Ziggo
Secured Finance B.V. ("Ziggo Secured Finance"), a special purpose
financing entity, agreed to sell to certain financial institutions,
subject to certain conditions, the Ziggo Senior Secured Notes (as
defined below). The Ziggo Senior Secured Notes are being issued as
part of an internal reorganization of Liberty Global's broadband
and wireless communications businesses in the Netherlands (the
"Reorganization Transactions") whereby UPC Nederland B.V. and/or
its successor company and its subsidiaries will become subsidiaries
of UPC Nederland Holding I B.V. ("UPC Netherlands Bondco"), which
is a direct wholly-owned subsidiary of Ziggo Group Holding B.V.
("Ziggo Group Holding"), an indirect wholly-owned subsidiary of
Liberty Global. Currently UPC Nederland B.V. is an indirect
wholly-owned subsidiary of UPC Holding B.V. ("UPC Holding"), and
the proceeds of the Ziggo Senior Secured Notes will, assuming the
completion of the Reorganization Transactions, ultimately be used
in part to repay certain indebtedness of UPC Holding.
Furthermore, as part of the Reorganization Transactions, UPC
Broadband Holding B.V., a direct wholly-owned subsidiary of UPC
Holding, launched additional term loan facilities (the "New UPC
Facilities") under its existing credit facility agreement (the "UPC
Broadband Credit Agreement"). The terms of the New UPC Facilities
provide for the rollover of the additional term loans into a new
senior secured credit facility agreement expected to be entered
into by Ziggo Secured Finance, as further described below. It is
currently expected that the aggregate amount of the New UPC
Facilities will be approximately 690.0 million ($798.2 million at
the January 21, 2015 exchange rate). The proceeds of the New UPC
Facilities, if entered into, will be used to refinance one or more
existing facilities under the UPC Broadband Credit Agreement.
Liberty Global currently expects to complete the Reorganization
Transactions during the first quarter of 2015; however no assurance
can be given that the Reorganization Transactions will be completed
as described herein or at all.
The summary, terms, conditions and provisions of the issuance of
the Ziggo Senior Secured Notes, and the intended use of the
proceeds therefrom, the New Ziggo Group Senior Secured Credit
Facility (as defined below) and the contemplated Reorganization
Transactions are qualified in their entirety by the disclosure
below in this Current Report on Form 8-K, the indenture related to
the issuance of the Ziggo Senior Secured Notes and the applicable
documents related to the SPV Credit Facility Rollover (as defined
below).
Ziggo Senior Secured Notes
On January 21, 2015, Ziggo Secured Finance entered into a
purchase agreement (the "Purchase Agreement") with, among others,
Credit Suisse Securities (Europe) Limited, as representative of the
several initial purchasers named therein (collectively, the "Ziggo
Initial Purchasers"), pursuant to which Ziggo Secured Finance
agreed to sell, subject to the terms and conditions set forth
therein, 800.0 million ($925.5 million at the January 21, 2015
exchange rate) aggregate principal amount of its 3.750% senior
secured notes due 2025 (the "Ziggo Senior Secured Notes"), at par,
to the Ziggo Initial Purchasers in a private offering in accordance
with Rule 144A and Regulation S under the Securities Act of 1933,
as amended. The Ziggo Senior Secured Notes will mature on January
15, 2025. Interest on the Ziggo Senior Secured Notes will be
payable semi-annually on each January 15 and July 15, beginning on
July 15, 2015.
Ziggo Secured Finance is incorporated under the laws of the
Netherlands, as a special purpose financing company, for the
primary purpose of (i) facilitating the offering of the Ziggo
Senior Secured Notes and (ii) the SPV Credit Facility Rollover, and
is owned 100% by Ziggo Secured Finance B.V., a private limited
company incorporated under the laws of the Netherlands. The Ziggo
Senior Secured Notes will be issued pursuant to an indenture (the
"Ziggo Senior Secured Notes Indenture"), to be dated on or about
February 4, 2015 (the "Issue Date") among Ziggo Secured Finance, as
issuer, and Deutsche Trustee Company Limited, as trustee (the
"Trustee"), that will be executed in connection with the completion
of the offering of the Ziggo Senior Secured Notes. Pending
consummation of the Reorganization Transactions, the net proceeds
of the Ziggo Senior Secured Notes (the "Escrowed Proceeds") will be
placed into one or more segregated escrow accounts (the "Escrow
Account") for the benefit of the holders of the Ziggo Senior
Secured Notes pursuant to an escrow deed (the "Escrow Agreement").
The release of the Escrowed Proceeds will be subject to the
satisfaction of certain conditions, including the certification
that the Reorganization Transactions will be consummated within
three business days following the release of the Escrowed Proceeds,
and as further set out in the Escrow Agreement. If the conditions
to the release of the Escrowed Proceeds have not been satisfied on
or prior to July 31, 2015 (the "Longstop Date"), the Ziggo Senior
Secured Notes will be subject to a special mandatory redemption
(the "Special Mandatory Redemption") at a redemption price equal to
100% of the aggregate initial issue price of the Ziggo Senior
Secured Notes plus accrued and unpaid interest from the Issue Date
to such special mandatory redemption date and additional amounts,
if any.
Upon release of the Escrowed Proceeds from the Escrow Accounts
(the "Escrow Release Date"), Ziggo Secured Finance will use the
proceeds from the offering of the Ziggo Senior Secured Notes to
fund one or more proceeds loans denominated in euro, in an
aggregate principal amount equal to the principal amount of the
Ziggo Senior Secured Notes (together, the "Senior Secured Proceeds
Loans"), to one or both of UPC Netherlands Holding III B.V. ("UPC
Netherlands Holdco III") and Ziggo B.V. ("Ziggo BV" and, together
with UPC Netherlands Holdco III, the "Senior Secured Proceeds Loan
Borrowers"), subject to the terms of the proceeds loan facility
agreement (the "Senior Secured Proceeds Loan Facility"), between,
among others, Ziggo Secured Finance, as lender, the Obligors (as
defined below) and ING Bank N.V. as security agent (the "Security
Trustee"). The Senior Secured Proceeds Loan Borrowers will use the
proceeds from the Senior Secured Proceeds Loans to (i) fund a loan,
dividend or other distribution to Ziggo Group Holding, which
proceeds will in turn be loaned or distributed by Ziggo Group
Holding to other Liberty Global subsidiaries, to indirectly fund
the Reorganization Transactions, and (ii) pay fees, costs and
expenses related to the offering of the Ziggo Senior Secured Notes.
Although the Senior Secured Proceed Loan Borrowers have no equity
or voting interest in Ziggo Secured Finance, the Senior Secured
Proceeds Loans create a variable interest in Ziggo Secured Finance
for which the Senior Secured Proceeds Loan Borrowers are the
primary beneficiaries, as contemplated by generally accepted
accounting principles in the United States (U.S. GAAP). As such,
the Senior Secured Proceeds Loan Borrowers and their respective
parent entities, including Ziggo Group Holding and Liberty Global,
will be required by the provisions of U.S. GAAP to consolidate
Ziggo Secured Finance following the issuance of the Ziggo Senior
Secured Notes. As such, the amounts outstanding under the Senior
Secured Proceeds Loans will eliminate in Ziggo Group Holding's and
Liberty Global's consolidated financial statements.
Subject to the Special Mandatory Redemption and the
circumstances below, the Ziggo Senior Secured Notes are
non-callable until January 15, 2020. At any time prior to January
15, 2020, Ziggo Secured Finance may redeem some or all of the Ziggo
Senior Secured Notes at a price equal to 100% of the principal
amount of the Ziggo Senior Secured Notes redeemed plus accrued and
unpaid interest to (but excluding) the redemption date at a
"make-whole" premium, which is the present value of all remaining
scheduled interest payments to the redemption date using the
discount rate (as specified in the Ziggo Senior Secured Notes
Indenture) as of the redemption date plus 50 basis points.
On or after January 15, 2020, Ziggo Secured Finance may redeem
all, or from time to time a part, of the Ziggo Senior Secured Notes
at the following redemption prices (expressed as a percentage of
the principal amount) plus accrued and unpaid interest and
additional amounts, if any, to the applicable redemption date, if
redeemed during the twelve-month period commencing on January 15 of
the years set forth below:
Year Redemption Price
2020 101.875%
2021 101.250%
2022 100.625%
2023 and thereafter 100.
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The full text of this SEC filing can be retrieved at:
http://www.sec.gov/Archives/edgar/data/1570585/000157058515000006/a8-kjanuary282015ziggoseni.htm
Any exhibits and associated documents for this SEC filing can be
retrieved at:
http://www.sec.gov/Archives/edgar/data/1570585/000157058515000006/0001570585-15-000006-index.htm
Public companies must file a Form 8-K, or current report, with
the SEC generally within four days of any event that could
materially affect a company's financial position or the value of
its shares.
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