Regal amends loan, permitting repurchases and changing pricing and covenants

By Sara Rosenberg

New York, Jan. 21 - Regal Entertainment Group amended its credit facility, allowing for the repurchase of loans, raising pricing and modifying covenants, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

With the amendment, the company can buy back up to $300 million in outstanding loans through a Dutch auction at a price below par within 270 days from the amendment date.

Also, pricing on the revolver and the term loan was increased by 200 basis points. Revolver pricing is now Libor plus 475 bps, but can range from Libor plus 400 bps to 475 bps based on the consolidated leverage ratio. Term loan pricing is now Libor plus 375 bps, but can drop to Libor plus 350 bps if leverage is less than or equal to 3.00:1.00.

The amendment also eliminated the company's option to elect one-month interest periods.

As for covenants, the time period for which the maximum consolidated adjusted leverage ratio may not exceed 5.75:1.00 was extended until the second fiscal quarter of 2011, and then it will move to 5.50:1.00 from the third fiscal quarter of 2011 through the fourth fiscal quarter of 2011, and 5.25:1.00 from the first fiscal quarter of 2012 and thereafter.

In addition, the time period for which the maximum consolidated leverage ratio may not exceed 3.75:1.00 was extended until the second fiscal quarter of 2011, and then it will move to 3.50:1.00 from the third fiscal quarter of 2011 through the fourth fiscal quarter of 2011, and 3.25:1.00 from the first fiscal quarter of 2012 and thereafter.

Furthermore, the company may exclude a minimum of $100 million, but not more than $200 million, of subordinated debt that is used to repay amounts outstanding under the term loan from certain financial covenant calculations.

The amendment was completed on Jan. 20.

Credit Suisse is the administrative agent on the deal.

Regal is a Knoxville, Tenn.-based motion picture exhibitor.

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