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SEC Filings

10-K
CINEMARK HOLDINGS, INC. filed this Form 10-K on 02/28/2014
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Table of Contents

On June 24, 2013, Cinemark USA, Inc. redeemed its 8.625% Senior Notes at 112.035% of the principal amount, inclusive of a make-whole premium, plus accrued and unpaid interest, utilizing the proceeds from the issuance of the 4.875% Senior Notes discussed above. As a result of the redemption, we wrote-off approximately $8.0 million in unamortized bond discount and $7.6 million in unamortized debt issue costs, paid a make-whole premium of approximately $56.6 million and paid other fees of $0.1 million, all of which are reflected in loss on early retirement of debt during the year ended December 31, 2013.

Covenant Compliance

As of December 31, 2013, we believe we were in full compliance with all agreements, including all related covenants, governing our outstanding debt.

Ratings

We are rated by nationally recognized rating agencies. The rating scales and methodologies used to derive individual ratings may vary from agency to agency. Credit ratings are issued by credit rating agencies based on evaluations of our ability to pay back our outstanding debt and the likelihood that we would default on that debt prior to its maturity. The credit ratings issued by the credit rating agencies represent the credit rating agency’s evaluation of both qualitative and quantitative information for our company. The credit ratings that are issued are based on the credit rating agency’s judgment and experience in determining what information should be considered in giving a rating to a particular company. Ratings are always subject to change and there can be no assurance that our current ratings will continue for any given period of time. A downgrade of our debt ratings, depending on the extent, could increase the cost to borrow funds. Below are our latest credit ratings, which were published by the respective agency during May 2013.

 

Category

  Moody’s   Standard and Poor’s

Cinemark USA, Inc. Amended Senior Secured Credit Facility

  Ba1   BB+

Cinemark USA, Inc. 4.875% Senior Notes

  B2   BB-

Cinemark USA, Inc. 5.125% Senior Notes

  B2   BB-

Cinemark USA, Inc. 7.375% Senior Subordinated Notes

  B3   B

With respect to the ratings issued by Moody’s as noted above, Moody’s defines these ratings as follows:

 

   

‘Ba1’ — Obligations rated Ba are judged to be speculative and are subject to substantial credit risk. The Prime-1 rating indicates the issuer has a superior ability to repay short-term debt.

 

   

‘B2’ — Obligations rated B are considered speculative and are subject to high credit risk. The Prime-2 portion of the rating indicates issuer has a strong ability to repay short-term debt.

 

   

‘B3’ — Obligations rated B are considered speculative and are subject to high credit risk. The Prime-3 portion of the rating indicates issuer has an acceptable ability to repay short-term debt.

With respect to the ratings issued by Standard and Poor’s as noted above, Standard and Poor’s defines these ratings as follows:

 

   

‘B’ — More vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments.

 

   

‘BB+’ — Considered highest speculative grade by market participants.

 

   

‘BB-’ — Less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions.

 

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