Panavision has revamped its capital structure, amending and restating its existing $250 million credit facility and issuing $100 million in private placement notes in order to restructure about $220 million of bank debt scheduled to mature in 2004. "The major benefit is that the company rescheduled a significant amount of amortization," explained Bobby Jenkins, Panavision's cfo.
The amended and restated credit includes a $135 million term loan. The proceeds from the note issue and the amended credit refinanced the existing bank debt, which included a $100 million revolver and $150 million term loan.
Along with changes to the company's debt, Panavision received a $23 million equity injection from majority shareholder, MacAndrews & Forbes Holdings. Moreover, MacAndrews & Forbes converted approximately $19 million of debt into preferred stock. MacAndrews & Forbes is providing Panavision with a $20 million unsecured revolving line of credit. In addition, due to the smaller size of the new outstanding credit facility, Panavision was able to restructure its credit agreement covenants to allow for more operational flexibility.
The new term loan is priced at LIBOR plus 61/4%. Jenkins said the rate was somewhat higher than the prior facility to ensure the success of the refinancing. The second-lien note issue carries a 121/2% coupon. J.P Morgan is the agent bank for the credit facility. The private placement paper was purchased by several firms.