Regal Cinemas Said to Seek Lower Rate on $988 Million LoanKrista Giovacco
Regal Cinemas Inc., a movie-theater operator, is seeking to reduce the rate on a $988 million first-lien loan, according to a person with knowledge of the matter.
Credit Suisse Group AG is leading the financing for the unit of Regal Entertainment Group and will host a lender call at 3:30 p.m. today in New York, said the person, who asked not to be identified because the deal is private.
The debt, which expires in August 2017, will pay interest at 3 percentage points more than the London interbank offered rate or 2.75 percentage points more than the lending benchmark, depending upon leverage, or debt to earnings before interest, taxes, depreciation and amortization, the person said.
Regal obtained the existing loan in 2011 at a rate of 3.25 percentage points more than Libor, according to data compiled by Bloomberg.
The debt fell 0.625 cent to 100.625 cents on the dollar from 101.25 cents yesterday, according to prices compiled by Bloomberg.
Ken Thewes, a spokesman for Regal, didn’t immediately return a phone call seeking comment.
The proposed transaction will be offered to lenders at par, the person said. Libor, the rate banks charge to lend to each other, won’t have a minimum.
Lenders to the new loan will receive call protection for one year at 101 cents, the person said, meaning Knoxville, Tennessee-based Regal would have to pay one cent more than face value to reprice the debt in its first year.
The new financing will strip out financial-maintenance covenants under Regal’s credit pact, the person said.
First-lien debt is repaid first in a bankruptcy or liquidation.