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AMC Entertainment Seeks $300 Million Loan for Tender Offer

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Feb. 7 (Bloomberg) -- AMC Entertainment Inc., owner of the second-largest U.S. movie-theater chain, is seeking a $300 million term loan to fund a tender offer and to repay outstanding debt.

The new loan will mature in 2018, the Kansas City, Missouri-based company said today in a regulatory filing.

The debt will have an interest rate 3.5 percentage points more than the London interbank offered rate, with a 1 percent minimum on the lending benchmark, according to a person with knowledge of the transaction.

AMC is proposing to sell the loan at 99 cents on the dollar, said the person, who declined to be identified because the terms are private.

Citigroup Inc., Credit Suisse Group AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. are arranging the deal, according to the person. Commitments from lenders are due Feb. 15 at 5 p.m., New York time.

AMC plans to commence a cash tender offer to purchase as much as $160 million of its outstanding $300 million 8 percent senior subordinated notes due 2014, according to the filing.

Moody’s Investors Service rated the proposed term loan Ba2, saying in a report today that “the transaction favorably extends the maturity profile and could result in a modest reduction in interest expense.”

AMC has leverage, or debt to earnings before interest, taxes, depreciation and amortization, of 8 times, Moody’s said.

Regal Entertainment Group is the largest U.S. movie-theater operator.

To contact the reporter on this story: Richard Bravo in New York at rbravo5@bloomberg.net.

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net.

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