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Debt

12 Months Ended

Dec. 31, 2019

Debt and Lease Obligation [Abstract]

The U.S. dollar equivalents of the components of our debt are as follows:



	December 31, 2019						Principal amount
	Weighted average interest rate (a)		Unused borrowing capacity (b)				Principal amount
			Borrowing currency		U.S. $ equivalent		December 31,
			Borrowing currency		U.S. $ equivalent		2019		2018
			in millions

VM Senior Secured Notes	5.34	%	—		$	—	$	5,916.9	$	6,268.3
VM Credit Facilities (c)	3.94	%	(d)		1,326.3		5,473.3		4,600.5
VM Senior Notes	5.34	%	—		—		1,583.8		1,999.9
Telenet Credit Facility	3.89	%	(e)		567.0		3,541.4		3,145.7
Telenet Senior Secured Notes	4.69	%	—		—		1,673.7		1,687.1
Telenet SPE Notes	—		—		—		—		546.2
UPCB SPE Notes	4.54	%	—		—		2,420.1		2,445.5
UPC Holding Bank Facility	—		€	990.1	1,111.7		—		1,645.0
UPC Holding Senior Notes	4.60	%	—		—		1,202.3		1,215.5
Vendor financing (f)	4.12	%	—		—		3,748.2		3,620.3
ITV Collar Loan	0.90	%	—		—		1,435.5		1,379.6
Derivative-related debt instruments (g)	2.58	%	—		—		81.1		301.9
Other (h)	3.96	%	—		—		571.8		459.8
Total debt before deferred financing costs, discounts and premiums (i)	4.30	%			$	3,005.0	$	27,648.1	$	29,315.3

The following table provides a reconciliation of total debt before deferred financing costs, discounts and premiums to total debt and finance lease obligations:



	December 31,
	2019			2018
	in millions

Total debt before deferred financing costs, discounts and premiums	$	27,648.1		$	29,315.3
Deferred financing costs, discounts and premiums, net	(82.7		)	(131.4		)
Total carrying amount of debt	27,565.4			29,183.9
Finance lease obligations (note 12)	617.1			621.3
Total debt and finance lease obligations	28,182.5			29,805.2
Current maturities of debt and finance lease obligations	(3,877.2		)	(3,615.2		)
Long-term debt and finance lease obligations	$	24,305.3		$	26,190.0

_______________

(a)

Represents the weighted average interest rate in effect at December 31, 2019 for all borrowings outstanding pursuant to each debt instrument, including any applicable margin. The interest rates presented represent stated rates and do not include the impact of derivative instruments, deferred financing costs, original issue premiums or discounts and commitment fees, all of which affect our overall cost of borrowing. Including the effects of derivative instruments, original issue premiums or discounts and commitment fees, but excluding the impact of deferred financing costs, our weighted average interest rate on our aggregate variable- and fixed-rate indebtedness was 4.14% at December 31, 2019. For information regarding our derivative instruments, see note 8.

(b)

Unused borrowing capacity represents the maximum availability under the applicable facility at December 31, 2019 without regard to covenant compliance calculations or other conditions precedent to borrowing. At December 31, 2019, based on the most restrictive applicable leverage covenants, the full amount of unused borrowing capacity was available to be borrowed under each of the respective subsidiary facilities, and based on the most restrictive applicable leverage-based restricted payment tests, there were no restrictions on the respective subsidiary's ability to make loans or distributions from this availability to Liberty Global or its subsidiaries or other equity holders, except as shown in the table below. In the following table, we present (i) for each subsidiary where the ability to borrow is limited, the actual borrowing availability under the respective facility and (ii) for each subsidiary where the ability to make loans or distributions from this availability is limited, the amount that can be loaned or distributed to Liberty Global or its subsidiaries or other equity holders. The amounts presented below reflect any applicable restrictions in effect at December 31, 2019, both before and after completion of the relevant December 31, 2019 compliance reporting requirements, but do not consider any actual or potential changes to our borrowing levels or any amounts loaned or distributed subsequent to December 31, 2019, or the impact of additional amounts that may be available to borrow, loan or distribute under certain defined baskets within each respective facility.



	December 31, 2019				Upon completion of relevant December 31, 2019 compliance reporting requirements
	Borrowing currency		U.S. $ equivalent		Borrowing currency		U.S. $ equivalent
	in millions
Limitation on availability to be borrowed under (1):
VM Credit Facilities	£	533.8	$	708.0	£	921.6	$	1,222.3
UPC Holding Bank Facility	€	990.1	$	1,111.7	€	828.8	$	930.6

_______________


(1)	The VM Credit Facilities and the UPC Holding Bank Facility have no additional restriction to loan or distribute from this availability.

(c)

Amounts include £103.6 million ($137.4 million) and £41.9 million ($55.6 million) at December 31, 2019 and 2018, respectively, of borrowings pursuant to excess cash facilities under the VM Credit Facilities. These borrowings are owed to certain non-consolidated special purpose financing entities that have issued notes to finance the purchase of receivables due from Virgin Media to certain other third parties for amounts that Virgin Media and its subsidiaries have vendor financed. To the extent the proceeds from these notes exceed the amount of vendor financed receivables available to be purchased, the excess proceeds are used to fund these excess cash facilities.

(d)

Unused borrowing capacity under the VM Credit Facilities relates to a multi-currency revolving facility with a maximum borrowing capacity equivalent to £1,000.0 million ($1,326.3 million) (the VM Revolving Facility), which was undrawn at December 31, 2019. During 2019, the VM Revolving Facility was amended and as a result, VM Revolving Facility A and VM Revolving Facility B were cancelled in full and replaced with a single revolving facility maturing on January 31, 2026.

(e)

Unused borrowing capacity under the Telenet Credit Facility comprises (i) €400.0 million ($449.0 million) under Telenet Facility AG, (ii) €60.0 million ($67.4 million) under Telenet Facility AP, which was entered into in May 2019, (iii) €25.0 million ($28.1 million) under the Telenet Overdraft Facility and (iv) €20.0 million ($22.5 million) under the Telenet Revolving Facility, each of which were undrawn at December 31, 2019.

(f)

Represents amounts owed pursuant to interest-bearing vendor financing arrangements that are used to finance certain of our property and equipment additions and operating expenses. These obligations are generally due within one year and include VAT that was paid on our behalf by the vendor. Repayments of vendor financing obligations are included in repayments and repurchases of debt and finance lease obligations in our consolidated statements of cash flows.


(g)	Includes amounts associated with certain derivative-related borrowing instruments, including $45.6 million and $248.6 million at December 31, 2019 and 2018, respectively, carried at fair value. These instruments mature at various dates through January 2025. For information regarding fair value hierarchies, see note 9.


(h)	As of December 31, 2019 and 2018, amounts include (i) $264.6 million and $225.9 million, respectively, of debt collateralized by certain trade receivables of Virgin Media and (ii) $55.3 million and $82.9 million, respectively, related to principal borrowings outstanding under the Lionsgate Loan.

(i)

As of December 31, 2019 and 2018, our debt had an estimated fair value of $28.4 billion and $28.5 billion, respectively. The estimated fair values of our debt instruments are generally determined using the average of applicable bid and ask prices (mostly Level 1 of the fair value hierarchy) or, when quoted market prices are unavailable or not considered indicative of fair value, discounted cash flow models (mostly Level 2 of the fair value hierarchy). The discount rates used in the cash flow models are based on the market interest rates and estimated credit spreads of the applicable entity, to the extent available, and other relevant factors. For additional information regarding fair value hierarchies, see note 9.

General Information

At December 31, 2019, most of our outstanding debt had been incurred by one of our three subsidiary “borrowing groups.” References to these borrowing groups, which comprise Virgin Media, UPC Holding and Telenet, include their respective restricted parent and subsidiary entities.

Credit Facilities. Each of our borrowing groups has entered into one or more credit facility agreements with certain financial and other institutions. Each of these credit facilities contain certain covenants, the more notable of which are as follows:


•	Our credit facilities contain certain consolidated net leverage ratios, as specified in the relevant credit facility, which are required to be complied with (i) on an incurrence basis and/or (ii) when the associated revolving credit facilities have been drawn beyond a specified percentage of the total available revolving credit commitments, on a maintenance basis;

•

Subject to certain customary and agreed exceptions, our credit facilities contain certain restrictions which, among other things, restrict the ability of the members of the relevant borrowing group to (i) incur or guarantee certain financial indebtedness, (ii) make certain disposals and acquisitions, (iii) create certain security interests over their assets and (iv) make certain restricted payments to their direct and/or indirect parent companies (and indirectly to Liberty Global) through dividends, loans or other distributions;


•	Our credit facilities require that certain members of the relevant borrowing group guarantee the payment of all sums payable under the relevant credit facility and such group members are required to grant first-ranking security over their shares or, in certain borrowing groups, over substantially all of their assets to secure the payment of all sums payable thereunder;

•

In addition to certain mandatory prepayment events, our credit facilities provide that the instructing group of lenders under the relevant credit facility, under certain circumstances, may cancel the group’s commitments thereunder and declare the loan(s) thereunder due and payable after the applicable notice period following the occurrence of a change of control (as specified in the relevant credit facility);

•

Our credit facilities contain certain customary events of default, the occurrence of which, subject to certain exceptions, materiality qualifications and cure rights, would allow the instructing group of lenders to (i) cancel the total commitments, (ii) declare that all or part of the loans be payable on demand and/or (iii) accelerate all outstanding loans and terminate their commitments thereunder;


•	Our credit facilities require members of the relevant borrowing group to observe certain affirmative and negative undertakings and covenants, which are subject to certain materiality qualifications and other customary and agreed exceptions; and


•	In addition to customary default provisions, our credit facilities generally include certain cross-default or cross-acceleration provisions with respect to other indebtedness of members of the relevant borrowing group, subject to agreed minimum thresholds and other customary and agreed exceptions.

Senior and Senior Secured Notes. Certain of our borrowing groups have issued senior and/or senior secured notes. In general, our senior and senior secured notes (i) are senior obligations of each respective issuer within the relevant borrowing group that rank equally with all of the existing and future senior debt of such issuer and are senior to all existing and future subordinated debt of such issuer within the relevant borrowing group, (ii) contain, in most instances, certain guarantees from other members of the relevant borrowing group (as specified in the applicable indenture) and (iii) with respect to our senior secured notes, are secured by certain pledges or liens over the assets and/or shares of certain members of the relevant borrowing group. In addition, the indentures governing our senior and senior secured notes contain certain covenants, the more notable of which are as follows:

•

Our notes contain certain customary incurrence-based covenants. In addition, our notes provide that any failure to pay principal at its stated maturity (after giving effect to any applicable grace period) of, or any acceleration with respect to, other indebtedness of the issuer or certain subsidiaries over agreed minimum thresholds (as specified under the applicable indenture), is an event of default under the respective notes;

•

Subject to certain customary and agreed exceptions, our notes contain certain restrictions that, among other things, restrict the ability of the members of the relevant borrowing group to (i) incur or guarantee certain financial indebtedness, (ii) make certain disposals and acquisitions, (iii) create certain security interests over their assets and (iv) make certain restricted payments to its direct and/or indirect parent companies (and indirectly to Liberty Global) through dividends, loans or other distributions;

•

If the relevant issuer or certain of its subsidiaries (as specified in the applicable indenture) sell certain assets, such issuer must, subject to certain customary and agreed exceptions, offer to repurchase the applicable notes at par, or if a change of control (as specified in the applicable indenture) occurs, such issuer must offer to repurchase all of the relevant notes at a redemption price of 101%;


•	Our senior secured notes contain certain early redemption provisions including the ability to, during each 12-month period commencing on the issue date for such notes until the applicable call date, redeem up to 10% of the principal amount of the notes at a redemption price equal to 103% of the principal amount of the notes to be redeemed plus accrued and unpaid interest; and

•

Certain of our notes are non-callable prior to their stated maturity. The remainder of our notes are non-callable prior to their respective call date (as specified under the applicable indenture). At any time prior to the applicable call date, we may redeem some or all of the applicable notes by paying a “make-whole” premium, which is the present value of all remaining scheduled interest payments to the applicable call date using the discount rate as of the redemption date plus a premium (as specified in the applicable indenture). After the applicable call date, we may redeem some or all of these notes at various redemption prices plus accrued interest and additional amounts (as specified in the applicable indenture), if any, to the applicable redemption date.

SPE Notes. From time to time, we create special purpose financing entities (SPEs), most of which are 100% owned by third parties, for the primary purpose of facilitating the offering of senior secured notes, which we collectively refer to as the “SPE Notes.”

The SPEs used the proceeds from the issuance of SPE Notes to fund term loan facilities under the credit facilities made available to their respective borrowing group (as further described below), each a “Funded Facility” and collectively the “Funded Facilities.” Each SPE is dependent on payments from the relevant borrowing entity under the applicable Funded Facility in order to service its payment obligations under each respective SPE Note. Each of the Funded Facility term loans creates a variable interest in the respective SPE for which the relevant borrowing entity is the primary beneficiary and are consolidated by the relevant parent entities, including Liberty Global. As a result, the amounts outstanding under the Funded Facilities are eliminated in the respective borrowing group’s and Liberty Global’s consolidated financial statements. At December 31, 2019, we had outstanding SPE Notes issued by entities consolidated by (i) UPC Holding, collectively the “UPCB SPEs” and (ii) Telenet, collectively the “Telenet SPEs”.

Pursuant to the respective indentures for the SPE Notes (the SPE Indentures) and the respective accession agreements for the Funded Facilities, the call provisions, maturity and applicable interest rate for each Funded Facility are the same as those of the related SPE Notes. The SPEs, as lenders under the relevant Funded Facility for the relevant borrowing group, are treated the same as the other lenders under the respective credit facility, with benefits, rights and protections similar to those afforded to the

other lenders. Through the covenants in the applicable SPE Indentures and the applicable security interests over (i) all of the issued shares of the relevant SPE and (ii) the relevant SPE’s rights under the applicable Funded Facility granted to secure the relevant SPE’s obligations under the relevant SPE Notes, the holders of the SPE Notes are provided indirectly with the benefits, rights, protections and covenants granted to the SPEs as lenders under the applicable Funded Facility. The SPEs are prohibited from incurring any additional indebtedness, subject to certain exceptions under the SPE Indentures.

The SPE Notes are non-callable prior to their respective call date (as specified under the applicable SPE Indenture). If, however, at any time prior to the applicable SPE Notes call date, all or a portion of the loans under the related Funded Facility are voluntarily prepaid (a SPE Early Redemption Event), then the SPE will be required to redeem an aggregate principal amount of its respective SPE Notes equal to the aggregate principal amount of the loans prepaid under the relevant Funded Facility. In general, the redemption price payable will equal 100% of the principal amount of the applicable SPE Notes to be redeemed and a “make-whole” premium, which is the present value of all remaining scheduled interest payments to the applicable SPE Notes call date using the discount rate (as specified in the applicable SPE Indenture) as of the redemption date plus a premium (as specified in the applicable SPE Indenture).

Upon the occurrence of a SPE Early Redemption Event on or after the applicable SPE Notes call date, the SPE will redeem an aggregate principal amount of its respective SPE Notes equal to the principal amount of the related Funded Facility prepaid at a redemption price (expressed as a percentage of the principal amount), plus accrued and unpaid interest and additional amounts (as specified in the applicable SPE Indenture), if any, to the applicable redemption date.

Financing Transactions

Below we provide summary descriptions of certain financing transactions completed during 2019, 2018 and 2017. A portion of our financing transactions may include non-cash borrowings and repayments. During 2019, 2018 and 2017, non-cash borrowings and repayments aggregated $3,300.2 million, $2,583.3 million and $17,104.0 million, respectively.

Virgin Media - 2019 Financing Transactions

In May 2019, Virgin Media issued (i) $825.0 million principal amount of U.S. dollar-denominated senior secured notes and (ii) £300.0 million ($397.9 million) principal amount of sterling-denominated senior secured notes. Virgin Media then increased the amounts issued under these notes by issuing an additional (a) $600.0 million principal amount of U.S. dollar-denominated senior secured notes in July 2019 and (b) £40.0 million ($53.1 million) principal amount of sterling-denominated senior secured notes in August 2019. The net proceeds from the issuance of these notes were used to redeem (1) $802.4 million outstanding principal amount of U.S. dollar-denominated senior secured notes under the VM Senior Secured Notes, (2) £534.1 million ($708.4 million) outstanding principal amount of sterling-denominated senior secured notes under the VM Senior Secured Notes and (3) £300.0 million outstanding principal amount of sterling-denominated senior notes under the VM Senior Notes. In connection with these transactions, Virgin Media recognized a net loss on debt modification and extinguishment of $77.2 million related to (A) the payment of $75.8 million of redemption premiums and (B) the write-off of $1.4 million of unamortized deferred financing costs, discounts and premiums.

In October 2019, Virgin Media (i) entered into a $3,300.0 million U.S. dollar-denominated term loan facility and a €750.0 million ($842.1 million) euro-denominated term loan facility and (ii) issued £400.0 million ($530.5 million) principal amount of sterling-denominated senior secured notes. The net proceeds from these transactions, together with certain other funds, were used to (a) prepay in full the $3,400.0 million outstanding principal amount on a U.S. dollar-denominated term loan facility under the VM Credit Facilities and (b) redeem in full (1) $1,000.0 million outstanding principal amount of U.S. dollar-denominated senior secured notes and (2) £300.0 million ($397.9 million) outstanding principal amount of sterling-denominated senior secured notes, each under the VM Senior Secured Notes. In connection with these transactions, Virgin Media recognized a net loss on debt modification and extinguishment of $67.4 million related to (A) the payment of $46.0 million of redemption premiums and (B) the net write-off of $21.4 million of unamortized deferred financing costs, discounts and premiums.

Virgin Media - 2018 and 2017 Financing Transactions

During 2018 and 2017, Virgin Media completed a number of financing transactions that generally resulted in lower interest rates and extended maturities. In connection with these transactions, Virgin Media recognized losses on debt modification and extinguishment of $36.4 million and $67.5 million during 2018 and 2017, respectively. These losses include (i) the payment of redemption premiums of $28.2 million and $32.6 million, respectively, (ii) the write-off of unamortized deferred financing costs and discounts of $8.2 million and $40.6 million, respectively, (iii) the write-off of $7.0 million of unamortized premiums in 2017 and (iv) the payment of third-party costs of $1.3 million in 2017.

UPC Holding - 2019 Financing Transactions

In August 2019, a portion of the net proceeds from the sale of the Vodafone Disposal Group were used to prepay in full the $1,645.0 million outstanding principal amount on a U.S. dollar-denominated term loan facility under the UPC Holding Bank Facility. In connection with this transaction, UPC Holding recognized a loss on debt modification and extinguishment of $15.4 million related to the write-off of unamortized deferred financing costs and discounts.

UPC Holding - 2018 and 2017 Financing Transactions

During 2018 and 2017, UPC Holding completed a number of financing transactions that generally resulted in lower interest rates and extended maturities. In connection with these transactions, UPC Holding recognized losses on debt modification and extinguishment of $8.9 million and $112.1 million during 2018 and 2017, respectively. These losses include (i) the write-off of unamortized deferred financing costs and discounts of $6.9 million and $27.8 million, respectively, and (ii) the payment of redemption premiums of $2.0 million and $84.3 million, respectively.

Telenet - 2019 Financing Transactions

In July 2019, Telenet prepaid €106.0 million ($119.0 million) of outstanding principal amount on a euro-denominated term loan facility under the Telenet Credit Facility, together with accrued and unpaid interest and the related prepayment premiums, which was owed to the applicable Telenet SPE and, in turn, the Telenet SPE used such proceeds to redeem €106.0 million outstanding principal amount of euro-denominated notes under the Telenet SPE Notes. This transaction was funded using existing cash and the temporary draw-down of a euro-denominated revolving credit facility under the Telenet Credit Facility. In connection with this transaction, Telenet recognized a loss on debt modification and extinguishment of $4.0 million related to (i) the payment of $3.6 million of redemption premiums and (ii) the write-off of $0.4 million of unamortized deferred financing costs and discounts.

In October 2019, Telenet increased its commitments under (i) a U.S. dollar-denominated term loan facility by $220.0 million and (ii) a euro-denominated term loan facility by €175.0 million ($196.5 million), each under the Telenet Credit Facility. The net proceeds from these facilities were used to prepay in full the €371.0 million ($416.6 million) of outstanding principal amount on a euro-denominated term loan facility under the Telenet Credit Facility, together with accrued and unpaid interest and the related prepayment premiums, which was owed to the applicable Telenet SPE and, in turn, the Telenet SPE used such proceeds to redeem in full the €371.0 million outstanding principal amount of euro-denominated notes under the Telenet SPE Notes. In connection with this transaction, Telenet recognized a loss on debt modification and extinguishment of $50.7 million related to (a) the payment of $46.8 million of redemption premiums and (b) the write-off of $3.9 million of unamortized deferred financing costs and discounts.

Telenet - 2018 and 2017 Financing Transactions

During 2018 and 2017, Telenet completed a number of financing transactions that generally resulted in lower interest rates and extended maturities. In connection with these transactions, Telenet recognized losses on debt modification and extinguishment of $31.5 million and $75.7 million during 2018 and 2017, respectively. These losses include (i) the payment of redemption premiums of $19.3 million and $21.5 million, respectively, and (ii) the write-off of unamortized deferred financing costs and discounts of $12.2 million and $54.2 million, respectively.

Maturities of Debt

Maturities of our debt as of December 31, 2019 are presented below for the named entity and its subsidiaries, unless otherwise noted. Amounts represent U.S. dollar equivalents based on December 31, 2019 exchange rates:



	Virgin Media			UPC Holding (a)			Telenet (b)			Other			Total
	in millions
Year ending December 31:
2020	$	2,472.4		$	644.6		$	415.1		$	264.8		$	3,796.9
2021 (c)	726.2			22.7			13.2			1,029.2			1,791.3
2022	253.7			20.1			12.6			366.4			652.8
2023	125.4			17.5			12.2			29.3			184.4
2024	779.6			7.7			12.1			—			799.4
Thereafter	11,497.6			3,622.4			5,303.3			—			20,423.3
Total debt maturities (d)	15,854.9			4,335.0			5,768.5			1,689.7			27,648.1
Deferred financing costs, discounts and premiums, net	(23.2		)	(20.3		)	(27.1		)	(12.1		)	(82.7		)
Total debt	$	15,831.7		$	4,314.7		$	5,741.4		$	1,677.6		$	27,565.4
Current portion	$	2,472.4		$	644.6		$	415.1		$	263.6		$	3,795.7
Noncurrent portion	$	13,359.3		$	3,670.1		$	5,326.3		$	1,414.0		$	23,769.7

_______________


(a)	Amounts include the UPCB SPE Notes issued by the UPCB SPEs. As described above, the UPCB SPEs are consolidated by UPC Holding and Liberty Global.


(b)	Amounts include the Telenet SPE Notes issued by the Telenet SPEs. As described above, the Telenet SPEs are consolidated by Telenet and Liberty Global.


(c)	The amount for Virgin Media includes certain senior secured notes that have a contractual maturity date of January 15, 2025. Interest on these senior secured notes accrues at a rate of 6.0% through January 15, 2021 and at a rate of 11.0% thereafter. In light of these terms, the above maturity table assumes that these senior secured notes will be repaid or refinanced in 2021.


(d)	Amounts include vendor financing obligations of $3,748.2 million, as set forth below:



	Virgin Media		UPC Holding		Telenet		Other		Total
	in millions
Year ending December 31:
2020	$	2,337.8	$	644.6	$	402.9	$	68.9	$	3,454.2
2021	34.8		22.7		—		53.5		111.0
2022	24.6		20.1		—		47.2		91.9
2023	22.1		17.5		—		29.3		68.9
2024	14.5		7.7		—		—		22.2
Total vendor financing maturities	$	2,433.8	$	712.6	$	402.9	$	198.9	$	3,748.2
Current portion	$	2,337.8	$	644.6	$	402.9	$	68.9	$	3,454.2
Noncurrent portion	$	96.0	$	68.0	$	—	$	130.0	$	294.0