Movie Gallery made an interest payment on its senior unsecured notes, pushing the bonds up 4 1/2 points to 65. An investor said the trading in the notes was very active Wednesday last week, the day the company announced the payment. Its Wachovia-led term loan traded up 3/4 of a point to 94 1/2.
Movie Gallery made a $17.9 million interest payment to holders of its 11% '12 bonds. In a release, the company said it believes it has enough cash on hand, cash from operations, cash from non-core asset sales and available borrowings under its revolving credit facility to operate its business. It said it believes it can satisfy working capital and capital expenditure requirements and comply with financial covenants in its credit facility for the rest of fiscal 2006.
The video rental store reported a $14.9 million net loss in the second quarter, compared with a $12.2 million net loss in the same period last year. Adjusted EBITDA was $57.6 million, compared with a $60.2 million in the same quarter of 2005. In August it hired Merrill Lynch to advise it on ways to improve its capital structure as well as Alvarez & Marsal, a turnaround, restructuring and corporate advisory firm. A spokesman said the company will host a third-quarter earnings call either this week or next to update the market on it restructuring. He said no further interest payments are due this year.