Cineworld via its legal advisor Kirkland & Ellis has refused to pay an additional 1% interest in the form of LIBOR and EURIBOR floors on the first lien term loans due 2025, a sweetener
negotiated in November as part of the $450 million superpriority delayed-draw term loan facility due 2024, according to sources. The disagreement between the company and its term lenders arose from a potential loan documentation mistake, the sources said.
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The movie theater chain previously agreed to add a 1% floor to the $2.7 billion L+250 bps term loan, the $645 million L+275 bps incremental term loan, and the euro-denominated $214.6 million E+262.5 bps term loan, the sources said. Prior to the negotiation of the superpriority facility, the dollar and euro term loans were subject to 0% LIBOR and EURIBOR floors.
An ad hoc group of term lenders represented by Arnold & Porter as legal advisor and Houlihan Lokey as financial advisor held a call today to discuss the matter, the sources added.
The dollar-denominated term loan due 2025 was quoted today at 75.75/76.75, according to a trading desk.
A representative for Cineworld declined to comment. Kirkland & Ellis, Arnold & Porter and Houlihan Lokey did not immediately respond to requests for comment.
--Alexander Saeedy, Harvard Zhang