ENGLEWOOD, Colo., June 16 /PRNewswire-FirstCall/ -- Liberty Media Corporation (Nasdaq: LCAPA, LCAPB, LINTA, LINTB, LMDIA, LMDIB) and QVC, Inc. today announced the extension of debt maturities until March 2014.
'We are pleased to complete the extension of QVC's bank debt,' said Greg Maffei, President and CEO of Liberty. 'The new terms enhance QVC's capital structure and provide us with further financial flexibility to operate in this retail environment. Our ability to refinance this debt is reflective of the strength of and confidence in QVC's business.'
Concurrent with the closing of amendments to the $5.25 billion in bank credit facilities at QVC, Liberty Media retired $750 million of loans at par and QVC cancelled another $18 million of unfunded commitments at no cost. The remaining $4.48 billion bank credit facility will mature in six tranches between June 2010 and March 2014; 11% of the outstanding principal will be due in 2010; 16% in 2011; 9% in 2012; 9% in 2013; and 55% in 2014.
Lenders consenting to the amendments, which represent $4.998 billion in commitments, received modified terms, including interest rates equal to LIBOR plus a margin that varies between 350 and 550 basis points, depending on the tranche maturity. QVC's maximum leverage ratio covenant has been reduced to 3.9x from 4.0x through March 30, 2010; 3.75x through March 30, 2011; 3.50x through March 30, 2012; and 3.0x thereafter. The loans are secured by the stock and certain assets of QVC and certain of its subsidiaries.
Loans held by non-consenting lenders, which represent $252 million in commitments, will remain under the pricing terms of the previous credit facilities, with such debt maturing in 2011. Non-consenting lenders will continue to receive a maximum interest margin of LIBOR plus 100 basis points.
Cash used to retire the $750 million of loans came from a combination of $250 million in cash from QVC, $250 million in cash attributed to the Liberty Entertainment group and $250 million in cash attributed to the Liberty Capital group. The cash from the Liberty Entertainment group and the Liberty Capital group was provided pursuant to secured intergroup loan transactions authorized by the Liberty Media Board of Directors.
