Tying Barclay down

2 January 2003

The cable company has rejigged its planned new $500m loan facility, adding conditions that will seriously limit management’s discretion. Who’s providing the facility, and insisting on the conditions? NTL’s new shareholders. They clearly don’t trust management an inch.

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In a revised prospectus issued on 24 December, NTL has disclosed new terms for the planned $500m loan that is intended to help it exit from its restructuring process. Existing bondholders, who are set to exchange their $11bn of claims against the cable operator for 100% of its equity in the restructuring, will buy new NTL bonds for $500m. The new bonds will pay a 19% coupon, and will be redeemable in 2010 for $558.6m. As part of the deal, NTL is undertaking not to sell assets except to repay debt, and is signing up to a limit or a ban on its ability to buy back shares, borrow further, and pay dividends.

This bond issue replaces NTL's initial plan, under which the bondholders would have provided a $500m loan facility.

NTL declined to comment on the progress of its restructuring process.

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