Cinemark Holdings, Inc. Announces Pricing of $400 Million Convertible Senior Notes Offering
August 19 2020 - 7:30AM
Business Wire
Cinemark Holdings, Inc. (the “Company”) (NYSE:CNK) announced
today that it priced $400 million aggregate principal amount of its
4.50% Convertible Senior Notes due 2025 (the “Notes”) in a private
offering (the “Offering”) to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). The
Company has also granted the initial purchasers of the Notes a
13-day option to purchase up to an additional $60 million aggregate
principal amount of the Notes. The Offering is expected to close on
August 21, 2020, subject to customary closing conditions.
The Notes will be senior unsecured obligations of the Company
and will bear interest at a rate of 4.50% per annum, payable
semiannually in arrears on February 15 and August 15 of each year,
beginning on February 15, 2021. The Notes will mature on August 15,
2025, unless earlier repurchased or converted, and the Company will
not have the right to redeem the Notes prior to maturity. The
initial conversion rate will be 69.6767 shares of the Company’s
common stock per $1,000 principal amount of notes (equivalent to an
initial conversion price of approximately $14.35 per share of
common stock) and is subject to certain adjustments under the terms
of the Notes. The initial conversion price of the Notes represents
a premium of 30% over the last reported sale price of the Company’s
common stock on The New York Stock Exchange on August 18, 2020. The
Notes will be convertible at the option of the holders and may be
settled, at the Company’s election, in cash, shares of the
Company’s common stock or a combination thereof. Prior to the close
of business on the business day immediately preceding May 15, 2025,
the Notes will be convertible at the option of the holders of the
Notes only upon the satisfaction of specified conditions and during
certain periods. On or after May 15, 2025, holders may convert
their Notes at any time prior to the close of business on the
second scheduled trading day immediately preceding the maturity
date. If the Company undergoes certain fundamental changes, holders
of the Notes may require the Company to repurchase for cash all or
part of their Notes at a purchase price equal to 100% of the
principal amount of the Notes to be repurchased, plus accrued and
unpaid interest to, but not including, the fundamental change
repurchase date. In addition, if a make-whole fundamental change
occurs prior to the maturity date, the Company will, under certain
circumstances, increase the conversion rate for holders who convert
Notes in connection with such make-whole fundamental change.
The Company intends to use $45.8 million of net proceeds from
the Offering to pay the cost of the convertible note hedge
transactions described below (after such cost is partially offset
by the proceeds to the Company from the warrant transactions
described below). The Company intends to use any remaining net
proceeds from the Offering for general corporate purposes, which
may include repaying outstanding amounts under the revolving credit
line of the amended and restated senior secured credit facility of
the Company’s wholly-owned subsidiary, Cinemark USA, Inc. If the
initial purchasers exercise their option to purchase additional
Notes, the Company expects to use a portion of the net proceeds
from the sale of the additional Notes to enter into additional
convertible note hedge transactions (after such cost is partially
offset by the proceeds to the Company of the additional warrant
transactions that the Company expects to enter into in connection
with the additional Notes). The Company intends to use the
remainder of such net proceeds for general corporate purposes.
In connection with pricing of the Notes, the Company entered
into privately negotiated convertible note hedge and warrant
transactions with one or more of the initial purchasers of the
Notes or their respective affiliates (the “Option Counterparties”).
The exercise price of the warrants is initially $22.08, which
represents a premium of 100% over the last reported sale price of
the Company's common stock on The New York Stock Exchange on August
18, 2020, and is subject to certain adjustments under the terms of
the warrant transactions.
In connection with establishing their initial hedge of the
convertible note hedge and warrant transactions, the Option
Counterparties have advised the Company that they expect to
purchase shares of the Company’s common stock and/or enter into
various derivative transactions with respect to the Company’s
common stock concurrently with or shortly after pricing of the
Notes. This activity could increase (or reduce the size of any
decrease in) the market price of the Company’s common stock at that
time. In addition, the Option Counterparties may modify their hedge
positions by entering into or unwinding various derivatives with
respect to the Company’s common stock and/or purchasing or selling
the Company’s common stock or other securities of the Company in
secondary market transactions following the pricing of the Notes
and prior to the maturity of the Notes (and are likely to do so
during any observation period related to a conversion of the Notes
or in connection with any repurchase of the Notes by the Company on
any fundamental change repurchase date or otherwise). This activity
could also cause or avoid an increase or a decrease in the market
price of the Company’s common stock or the Notes, which could
affect a holder’s ability to convert the Notes and, to the extent
the activity occurs during any observation period related to a
conversion of the Notes, it could affect the amount and value of
the consideration that a holder will receive upon conversion of
such Notes.
The Notes were offered and sold only to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A
under the Securities Act. Neither the Notes nor any shares of the
Company’s common stock issuable upon conversion of the Notes have
been or will be registered under the Securities Act or the
securities laws of any state or other jurisdiction, and such
securities may not be offered or sold in the United States without
registration or an applicable exemption from the registration
requirements of the Securities Act and applicable state securities
or blue sky laws and foreign securities laws.
This press release shall not constitute an offer to sell, or the
solicitation of an offer to buy, any securities, nor shall there be
any sales of securities, in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
This notice is being issued pursuant to and in accordance with Rule
135c under the Securities Act.
About Cinemark Holdings:
Headquartered in Plano, TX, Cinemark (NYSE: CNK) is one of the
largest and most influential movie theatre companies in the world.
Cinemark’s circuit, comprised of various brands that also include
Century, Tinseltown and Rave, operates 534 theatres with 5,977
screens in 42 states domestically and 15 countries throughout South
and Central America. Cinemark consistently provides an
extraordinary guest experience from the initial ticket purchase to
the closing credits, including Movie Club, the first U.S.
exhibitor-launched subscription program; the highest Luxury Lounger
recliner seat penetration among the major players; XD - the No. 1
exhibitor-brand premium large format; and expansive food and
beverage options to further enhance the movie-going experience.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200819005207/en/
Chanda Brashears VP Investor Relations and Corporate
Communications (972) 665-1671 cbrashears@cinemark.com
Cinemark (NYSE:CNK)
Historical Stock Chart
From Aug 2024 to Sep 2024
Cinemark (NYSE:CNK)
Historical Stock Chart
From Sep 2023 to Sep 2024