Lehman Brothers expects to hold a bank meeting as early as today for a new $805 million credit facility for National CineMedia. The launch is being held up by changes being made to filings with the Securities and Exchange Commission due to the comment period, according to market sources. The deal is expected to comprise an $80 million revolver and a $725 million term loan. Price talk is currently LIBOR plus 1 3/4%, according to the SEC filing, but may be changed, according to a banker.
The debt is designed to be a high dividend structure, according to a banker. Excess cash flow will be used to pay dividends to the equity contributors as opposed to paying off more bank debt, he said. CineMedia is owned by a consortium of theater operators including Cinemark, Regal and AMC. The company is taking out the new debt in conjunction with an initial public offering. The Centennial, Colo.-based company plans to sell 38 million shares of common stock. National CineMedia is a theater advertising company that sells ads played in movie theaters before the movie starts. Calls to Gary Ferrera, cfo, were referred to a spokeswoman who did not return a call.