Lehman Brothers and Goldman Sachs last Wednesday launched a $1.27 billion senior secured credit facility for Cinemark USA. The deal consists of a $150 million revolver and a $1.12 billion term loan, both priced at LIBOR plus 2 1/4%. The facility will be used to finance the acquisition of Century Theatres and refinance about $340 million of existing debt. The syndication is expected to go well, with the banks already receiving a few $100 million commitments the day of the launch, according to a banker. Madison Dearborn Partners owns Cinemark.
Moody's Investors Service rated the loan Ba2 due to high leverage, sensitivity to the product from movie studios and a weak industry growth profile. Moody's expects pro forma leverage to be in the mid-six times range. Madison Dearborn tapped Lehman and Goldman in 2004 to finance the $1.5 billion buy-out of the company (LMW, 3/19/04).
Cinemark USA, a subsidiary of Cinemark, operates 202 theatres in 34 states in the U.S. and 112 theatres in 13 additional countries. California-based Century Theatres operates 78 theatres in 12 western states. Robert Copple, Cinemark USA cfo, was traveling and could not be reached. Calls to a company spokeswoman were not returned.