Cinemark Holdings Inc Cinemark Holdings Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Regulation FD Disclosure

 

 

 

 

 

 

 

 

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On July 18, 2024, Cinemark USA, Inc. (“Cinemark USA”), a wholly-owned subsidiary of Cinemark Holdings, Inc. (“Cinemark Holdings”), completed the offering (the “Offering”) of $500 million aggregate principal amount of its 7.0% Senior Notes due 2032 (the “Notes”). The Notes were offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to in accordance with Regulation S under the Securities Act. The Notes have not been, and are not required to be, registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws. The Notes were issued pursuant to an indenture (the “Indenture”) dated as of July 18, 2024 among Cinemark USA, certain subsidiary guarantors of Cinemark USA (the “Guarantors”) and Truist Bank, as trustee. A portion of the net proceeds from the Offering have been used to fund the Tender Offer (as defined below), and the remainder of the net proceeds will be used (i) to pay fees and expenses related to the Offering and the Tender Offer and (ii) for general corporate purposes.

Cinemark USA’s obligations under the Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by the Guarantors that guarantee, assume or in any other manner become liable with respect to any indebtedness of Cinemark USA or any Guarantor. If Cinemark USA cannot make payments on the Notes when they are due, the Guarantors must make them instead.

The Notes and the guarantees are Cinemark USA’s and the Guarantors’ senior unsecured obligations and (i) rank equally in right of payment to Cinemark USA’s and the Guarantors’ existing and future senior debt, including all borrowings under Cinemark USA’s senior secured credit agreement (the “Credit Agreement”) and Cinemark USA’s existing senior notes, (ii) rank senior in right of payment to Cinemark USA’s and the Guarantors’ future subordinated debt, (iii) are effectively subordinated to all of Cinemark USA’s and the Guarantors’ existing and future secured debt, to the extent of the value of the collateral securing such debt, including all obligations under the Credit Agreement, (iv) are structurally subordinated to all existing and future debt and other liabilities of Cinemark and (v) are structurally senior to Cinemark Holdings’ $460 million of 4.50% Convertible Notes due 2025.

The Notes will mature on August 1, 2032. Pursuant to the Indenture, interest on the Notes accrues at a rate of 7.0% per annum and is payable semi-annually in arrears on February 1 and August 1 of each year, beginning on February 1, 2025.

Cinemark USA has the option to redeem all or a part of the Notes at any time on or after August 1, 2027 at redemption prices specified in the Indenture. In addition, prior to August 1, 2027, Cinemark USA may redeem up to 40% of the aggregate principal amount of Notes with funds in an amount equal to the net proceeds of certain equity offerings at a redemption price equal to 107.000% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, so long as at least 60% of the principal amount of the Notes issued under the Indenture (including any additional notes) remains outstanding immediately after each such redemption. Prior to August 1, 2027, Cinemark USA has the option to redeem all or any portion of the Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest on the Notes, if any, plus a make-whole premium.

The Indenture limits Cinemark USA’s ability and the ability of its restricted subsidiaries to, among other things: (i) incur or guarantee additional indebtedness; (ii) pay dividends or distributions on, or redeem or repurchase, capital stock and make other restricted payments; (iii) make certain investments; (iv) engage in certain transactions with affiliates; (v) incur or assume certain liens; and (vi) consolidate, merge or transfer all or substantially all of their assets. These covenants are subject to a number of important qualifications and exceptions as set forth in the Indenture. Additionally, upon the occurrence of a Change of Control Triggering Event (as defined in the Indenture), Cinemark USA must offer to repurchase all of the Notes for a cash payment equal to 101% of the aggregate principal amount of the Notes repurchased, plus accrued and unpaid interest, if any, thereon to the repurchase date. The Indenture also provides for customary events of default.

The foregoing description of the Indenture is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached as Exhibit 4.1 to this Current Report on Form (this “Report”) and is incorporated by reference herein.

 

The information provided in Item 1.01 of this Report is hereby incorporated into this Item 2.03.

 

On July 18, 2024, Cinemark Holdings issued a press release announcing the consummation of the cash tender offer (the “Tender Offer”) by Cinemark USA to purchase any and all of its 5.875% senior notes due 2026 (the “5.875% Notes”). Following the expiration of the Tender Offer and the notice of guaranteed delivery date, $345,285,000 aggregate principal amount of the 5.875% Notes (85.26%) was validly tendered and not validly withdrawn in the Tender Offer. Cinemark USA accepted for payment all such 5.875% Notes validly tendered and not validly withdrawn in the Tender Offer and made payment for such 5.875% Notes on July 18, 2024 using a portion of the net proceeds from the Offering. A copy of the press release is being furnished as Exhibit 99.1 to this Report and is incorporated herein by reference.

The information described in Item 7.01 of this Report, including Exhibit 99.1, is being furnished, not filed, pursuant to Regulation FD. Accordingly, this information will not be incorporated by reference into any registration statement filed by Cinemark Holdings or Cinemark USA under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of this information is not intended to, and does not, constitute a determination or admission by Cinemark Holdings or Cinemark USA that this information is material or complete, or that investors should consider this information before making an investment decision with respect to any security of Cinemark Holdings or Cinemark USA or any of their affiliates.

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to signed on its behalf by the undersigned hereunto duly authorized.