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Lions Gate gets holder consents to lift borrowing cap under revolver
By Susanna Moon
Chicago, Oct. 15 - Lions Gate Entertainment Inc. may now incur up to $650 million of debt under its $800 million secured revolving credit facility after obtaining the needed consents from the holders of its $436 million of 10¼% senior secured second-priority notes due 2016, according to an 8-K filing with the Securities and Exchange Commission.
The consent solicitation expired on Oct. 12, and the company entered into a supplemental indenture on Oct. 15 amending its 10¼% notes to allow the company to incur additional secured debt under its credit agreement with JPMorgan Chase Bank, NA as administrative agent and issuing bank.
The amount was increased from the previous limit of $340 million.
Lions Gate previously said it planned to draw funds from the revolver to repay $299.2 million of subsidiary Summit Entertainment, LLC's credit facility dated Feb. 21, 2012.
After the Summit credit facility is repaid and terminated, Lions Gate plans to arrange for Summit and some of its affiliates to become guarantors of its $800 million revolver and the notes and to pledge their assets in support those guaranties, according to a previous filing with the SEC.
Consents were needed from the holders of at least a majority of the outstanding notes to amend the notes.
Lions Gate previously said it would pay a consent payment of $7.50 per $1,000 principal amount of notes to holders who delivered their consents by 5 p.m. ET on Oct. 12.
Lions Gate is a Santa Monica, Calif.-based subsidiary of Lions Gate Entertainment Corp., which is a filmed entertainment studio with headquarters in Vancouver, B.C.
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