Cineworld reworks U.S. and euro term loan B sizes, updates pricing

By Sara Rosenberg

New York, Feb. 6 – Cineworld Group plc upsized its U.S. seven-year covenant-light term loan B to $3,325,000,000 from $3 billion and its euro seven-year covenant-light term loan B to $750 million equivalent from $600 million equivalent and eliminated plans for a pound sterling seven-year covenant-light term loan B, according to a market source.

Prior to the bank meeting, it was said that the total amount of term loan B debt would be about $4 billion equivalent, including a carve-out of $1 billion across euro and pound with the split to be determined.

Also, pricing on the U.S. term loan was reduced to Libor plus 250 basis points from Libor plus 275 bps and the original issue discount was changed to 99.75 from 99.5, and pricing on the euro term loan was lowered to Euribor plus 262.5 bps from Euribor plus 300 bps and discount talk was modified to a range of 99.75 to par from 99.5, the source said.

The term loans have a 25 bps step-down when net secured leverage is less than 3.5 times.

The term loans still have a 0% floor, 101 soft call protection for six months and amortization of 1% per annum.

Talk on the pound sterling term loan that was eliminated was Libor plus 350 bps with a 0% Libor floor and 101 soft call protection for six months.

The company’s $4,375,000,000 equivalent of senior secured credit facilities (B1/BB-) also include a $300 million five-year revolver.

Barclays and HSBC Bank plc are the global coordinators on the debt, with Barclays left on the U.S. loan and HSBC left on the euro loan. Barclays is the administrative agent.

Commitments were scheduled to be due at the close of business on Tuesday, the source added.

Proceeds will be used to help fund the acquisition of Regal Entertainment Group and refinance existing debt.

Other funds for the transaction will come from around $2.27 billion in equity.

Under the agreement, Regal is being bought for $23.00 in cash for each share of class A and class B common stock, for a total transaction value of $5.9 billion, including the assumption of debt and net of cash acquired.

Closing is expected this quarter, subject to regulatory review, approval by the shareholders of Regal and Cineworld and other customary conditions.

Net leverage is expected to be around 4 times.

Cineworld is a London-based cinema operator. Regal is a Knoxville, Tenn.-based motion picture exhibitor.

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