Bond investors have pushed Virgin Media O2’s 2032 €1.81bn coupon down to 91 cents, its lowest level in six months. The move reflects a steep rise in the yield demanded, now near 9%, as the firm’s cash flow faces pressure from a saturated UK broadband market and investor confidence.

UK rivals have cut prices, siphoning customers and forcing Virgin Media O2 to spend more on network expansion. The credit default swap spread climbed to 622 basis points this month, the highest since 2010, and the company’s CDS is now the fastest‑growing in the iTraxx Crossover index.

To shore up its fiber footprint, the group bought the UK’s fourth‑largest network, Netomnia, for £2bn and will invest in the Nexfibre joint venture. The transaction delivers £1.1bn in cash and a 15 % stake, but future access fees could erode free cash flow by about £250mn a year.

Fitch Ratings downgraded Virgin Media O2 to B+, citing high leverage and falling revenue. The agency expects debt‑to‑EBITDA to rise above 6.0× in two years, and analysts warn that the Netomnia deal’s long‑term fees may trim free cash flow from £200mn in 2026 to £80mn by 2028.