Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Senior Secured Notes
On April 7, 2021, UPC Broadband Finco B.V. (the “Issuer”) (an indirect wholly-owned subsidiary of Liberty Global plc (“Liberty Global”)) entered into a purchase agreement (the “Purchase Agreement”) with, among others, BofA Securities, Inc., as representative of the initial purchasers named therein (the “Initial Purchasers”), pursuant to which the Issuer agreed to sell, subject to the terms and conditions set forth therein, $1,250.0 million aggregate principal amount of its 4.875% senior secured notes due 2031 (the “Notes”), at par, to the Initial Purchasers, in a private offering in accordance with Rule 144A and Regulation S under the Securities Act of 1933, as amended.
This Form 8-K is neither an offer to sell nor a solicitation of an offer to buy the Notes, nor shall there be any offer, solicitation or sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
The Notes will be issued pursuant to an indenture, to be dated as of April 21, 2021 (the “Issue Date”), among the Issuer and The Bank of New York Mellon Corporate Services Limited, as trustee (the “Trustee”) (the “Indenture”). The Notes will be the senior limited recourse obligations of the Issuer and will be secured by security interests in certain of the Issuer's rights, property and assets.
Interest and Maturity
The Notes will mature on July 15, 2031, and interest is payable on the Notes semi-annually in arrears on each January 15 and July 15, beginning on July 15, 2021.
Optional Redemption
Subject to a special optional redemption in connection with a UPC exchange transaction and except as described below, the Notes are non-callable until July 15, 2026. At any time prior to July 15, 2026, the Issuer may redeem some or all of the Notes at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest and additional amounts, if any, to (but excluding) the redemption date and a “make-whole” redemption price specified in the Notes, plus accrued and unpaid interest, if any, to, but excluding the redemption date.
On or after July 15, 2026, the Issuer may redeem all, or from time to time a part, of the 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 (but excluding) the applicable redemption date, if redeemed during the twelve-month period commencing on July 15 of the years set forth below:
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Year
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Notes Redemption Price
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2026
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102.438%
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2027
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101.219%
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2028
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100.609%
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2029 and thereafter
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100.000%
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In addition, at any time prior to July 15, 2026, the Issuer may redeem up to 40% of the original aggregate principal amount of the Notes with the net proceeds of one or more specified equity offerings at a redemption price of 104.875% of the principal amount of the Notes redeemed, plus accrued and unpaid interest and additional amounts, if any, to (but excluding) the date of redemption. Furthermore, prior to July 15, 2026, during each 12-month period commencing on the Issue Date, the Issuer may redeem up to 10% of the original aggregate principal amount of the Notes at a redemption price equal to 103% of the principal amount of the Notes redeemed plus accrued and unpaid interest and additional amounts, if any, to (but excluding) the date of redemption. In the event of certain events defined as constituting a change of control, the Issuer may be required to redeem the entire aggregate principal amount of the Notes at a redemption price equal to 101% of the principal amount of the Notes plus accrued and unpaid interest and additional amounts, if any, to (but excluding) the date of redemption.
New Finco Accession Agreement and New Finco Loan
On the Issue Date, the net proceeds from the issuance of the Notes plus certain fees payable to the Issuer (if any) will be used by the Issuer to finance a U.S. dollar denominated loan (the “New Finco Loan”) to UPC Financing Partnership (an indirectly owned subsidiary of Liberty Global) (“UPC Financing”), under an additional facility subject to the terms of the amended and restated senior secured credit facility agreement originally dated January 16, 2004, as amended, amended and restated or supplemented from time to time, between, inter alios, UPC Broadband Holding B.V. (“UPC Broadband Holding”), UPC Financing, the obligors listed therein and The Bank of Nova Scotia, as facility agent and security agent (the “UPC Credit Facility”). The New Finco Loan will be guaranteed on a senior basis by the guarantors of the UPC Credit Facility and secured on a pari passu basis with each of the other facilities under the UPC Credit Facility. In connection with the New Finco Loan, the Issuer and UPC Financing will enter into an accession agreement to the UPC Credit Facility relating to the New Finco Loan (the “New Finco Facility Accession Agreement”), which will have the same maturity redemption terms as the Indenture.