DEAL: Virgin Media’s mobile-backed bonds

Author: Amélie Labbé | Published: 22 Nov 2016

Virgin Media has sold the first mobile loan-backed bonds in a £125 million ($156 million) issuance that could be copied by other carriers in Europe.

The UK company, which was taken over by US telecoms giant Liberty Global in 2013, has traditionally relied on both the banking and bond markets (in US dollar and pound sterling).

According to Fitch Ratings, the company has over £8 billion of senior secured debt, £600 million of existing vendor financing, and over £2 billion of senior unsecured debt. It was, however, looking at alternative and cheaper sources of financing.

The securitisation was backed by loans Virgin Media offers to customers for mobile handset contracts. The programme has a scalable structure. According to Nina Alitalo, senior corporate counsel at Liberty Global, the company initially issued £125 million of four-year AA equivalent rated notes via a specially-created UK special purpose vehicle. But the company will be...