Oaktree Capital and Centerbridge Partners provided AMC Entertainment with a
commitment for a new £400 million senior secured term loan facility to refinance its existing £100 million L+250 bps Odeon revolver due February 2022 and provide additional liquidity of £300 million, according to sources.
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The new European facility would have a maturity of 2.5 years from the initial draw and would bear interest at 10.75% during the first year and 11.25% thereafter, with Odeon having the ability to elect to pay interest in cash or PIK for each interest period, the company said in an 8-K today.
The new facility would be secured by certain classes of assets in England, Finland, Germany, Spain and Sweden and share security in Ireland, Italy and the Netherlands. It would contain a number of covenants that are substantially similar to the covenants in the existing Odeon revolver. In addition, the new facility would contain a minimum liquidity covenant for Odeon and its subsidiaries. The facility would be guaranteed by certain subsidiaries of Odeon, and AMC would also provide a limited recourse guarantee.
The funding of the new facility is contingent on the consent of convertible noteholder Silver Lake Group, according to AMC. If the facility agreement governing the term loan facility is not entered into by Feb. 28, the commitments will terminate unless the parties agree to an extension.
AMC Entertainment said today that its existing liquidity would extend operations through July, in the absence of any increase in attendance levels and assuming continued landlord concessions and no additional liquidity. If attendance levels increase, the company estimates that its existing liquidity together with a portion of the proceeds it expects to receive under the at-the-market equity raise and additional landlord concessions would be sufficient to fund its operations through the end of 2021.
Separately, first lien lender Apollo Management has been working with Paul Weiss as counsel and PJT Partners as financial advisor with respect to its investments in AMC, according to sources. First lien lender Canyon Partners has been working with Quinn Emanuel as legal advisor, the sources said.
AMC Entertainment, Centerbridge Partners, Apollo, Paul Weiss, Canyon Partners and Quinn Emanuel did not immediately respond to requests for comment. Representatives for Oaktree Capital and PJT Partners declined to comment.
--Harvard Zhang