Cineplex Inc (TSX: CGX) has closed its previously announced offering of 7.5% senior secured second lien notes. The company managed to raise gross proceeds of $250 million through the offering.
The notes bear interest at a rate of 7.5% per annum and have a maturity of five years from the date of issuance, being February 26, 2026. The offering was lead by BMO Capital Markets and Scotiabank as joint bookrunning managers.
Proceeds from the financing will see a large portion allocated for the permanent reduction of debt on the firms books. $50 million of the proceeds will be used to pay down the firms term facility, while an additional $50 million will be used to pay down the revolving credit facility. Referred to as “permanent repayment,” it appears that the revolver will effectively be reduced in size.
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The remaining $144 million in net proceeds will then be used to pay down the revolving credit facility as well, the difference here however is that funds from this portion of the revolve may be redrawn as needed based on liquidity requirements of the company.
Cineplex last traded at $13.67 on the TSX.
FULL DISCLOSURE: Information for this briefing was found via Cineplex and Sedar. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
