Movie Gallery's term loan "B" dropped 3/4 point to the 92-93 range after the company said it was in talks with lenders about further amendments to its senior credit facility. The term loan "B" traded up slightly to 93 1/4 at press time, according to Markit. Wachovia Securities leads the $750 million loan, which launched in September 2005.
Joe Malugen, chairman and ceo, said in a release that the company would be seeking changes to the facility because of the continued softness in the rental industry. The company said it still expects revenues in the fourth quarter of 2005 to be between $675 million and $705 million. In a release, Malugen said the company is confident it will remain in full compliance with all debt covenants in the fourth quarter of 2005. "We continue to believe that our industry is long-term fundamentally sound, and we are looking forward to the introduction of next-generation, high-definition DVDs as a significant catalyst for our business," said Malugen. A spokesman for Movie Gallery said the talks with lenders had not yet begun and would not comment on the specifics of those potential discussions.