A total of $85 million in Regal Cinemas' bank debt traded up into the high 80s last week with dealers attributing it to a strengthening sector and reorganization for the debt. "It's getting close to the end," a trader said, noting that the restructuring is underway but declining to give details. "They had been in trouble for a while because of overall problems in the industry." Dealers also attribute the better levels to investor Philip Anschutz buying out much of the bank debt. Meanwhile, another cinema name that Anschutz has invested in, United Artists, has pulled out of bankruptcy. The Knoxville, Tenn.-based company has about 400 theaters across the country.
Kohlberg, Kravis, Roberts & Co. and Hicks, Muse, Tate & Furst of Dallas have made plays to keep control of Regal in its expected debt restructuring. The companies bought the theater chain in 1998, but their ownership stake could be threatened in a Chapter 11 restructuring.
Regal's levels bottomed out in the low 60s last year due to a saturation of cinemas. At the time Regal has been seeking restructuring of its $1.2 billion loan, and dealers speculated about a possible Chapter 11 bankruptcy filing (LMW, 12/11). Regal's credit breaks down into four tranches. Pricing is 21/2 % over LIBOR. Bank of Nova Scotia, J.P. Morgan Chase and Bank of America are the lead arrangers, according to Capital DATA Loanware.