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National Amusements Plans to Sell $390 Million of Notes to Refinance Debt
National Amusements Inc., the movie- theater and holding company controlled by billionaire Sumner Redstone, plans to sell $390 million of seven-year notes to refinance a bank credit line.
The senior secured issue may be sold as soon as next week, according to a person familiar with the transaction. The notes will have a provision allowing up to 10 percent of the debt to be redeemed at 103 percent annually during the first three years, after which time all of it can be called, said the person, who declined to be identified because terms aren’t set.
“The theater business has been stable through the downturn,” said Mike Simonton, a debt analyst with Fitch Ratings in Chicago. “Given how open the high-yield market has been to a range of companies, and companies much more highly leveraged than National Amusements, it’s not a surprise they’re able to tap the markets for a bond deal.”
Redstone’s National Amusements, which serves as the holding company for assets including his CBS Corp. and Viacom Inc. stock, is issuing the debt as the company’s $800 million unsecured revolving credit line nears its December maturity, according to data compiled by Bloomberg. The company sold $945 million of CBS and Viacom shares and as many as 35 theaters in the fourth quarter of last year to repay loans that threatened Redstone’s control of the two media companies.
National Amusements “resolved almost all of the issues with the lenders” during the financial crisis, Simonton said. “There must have been some bank debt that was pushed out a little bit, and that’s what this bond deal is presumably addressing.”
Redstone, 87, is the chairman of CBS and Viacom. The bonds may be sold through National Amusement’s NAI Entertainment Holdings LLC unit, the person said. Barclays Plc is managing the sale, the person said.
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