CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In thousands, except share and per share data
statement was declared effective by the SEC on July 9, 2013. On August 7, 2013, Cinemark USA, Inc. completed the exchange of registered 4.875% Senior Notes for all of the outstanding
4.875% Senior Notes.
Amended Senior Secured Credit Facility
On December 18, 2012, Cinemark USA, Inc. amended and restated its senior secured credit facility to include a seven year $700,000
term loan and a five year $100,000 revolving credit line, referred to herein as the Amended Senior Secured Credit Facility. The proceeds from the Amended Senior Secured Credit Facility, combined with a portion of the proceeds from the 5.125% Senior
Notes discussed below, were used to refinance the Companys Former Senior Secured Credit Facility. The Company incurred debt issue costs of approximately $12,000 during the year ended December 31, 2012 related to the amendment and
restatement. The term loan under the Amended Senior Secured Credit Facility matures in December 2019. The revolving credit line, which was undrawn at closing and remained undrawn as of December 31, 2013, matures in December 2017. Quarterly
principal payments in the amount of $1,750 are due on the term loan beginning March 2013 through September 2019 with the remaining principal of $652,750 due on December 18, 2019.
Interest on the term loan accrues at Cinemark USA, Inc.s option at: (A) the base rate equal to the higher of (1) the
prime lending rate as set forth on the British Banking Association Telerate page 5, or (2) the federal funds effective rate from time to time plus 0.50%, plus a margin of 2.0% per annum, or (B) a eurodollar rate plus a
margin of 3.0% per annum. Interest on the revolving credit line accrues, at Cinemark USA, Inc.s option, at: (A) a base rate equal to the higher of (1) the prime lending rate as set forth on the British Banking Association
Telerate page 5 and (2) the federal funds effective rate from time to time plus 0.50%, plus a margin that ranges from 1.00% to 1.75% per annum, or (B) a eurodollar rate plus a margin that ranges from 2.00% to
2.75% per annum. The margin of the revolving credit line is determined by the consolidated net senior secured leverage ratio as defined in the credit agreement.
Cinemark USA, Inc.s obligations under the Amended Senior Secured Credit Facility are guaranteed by Cinemark Holdings, Inc. and certain of Cinemark USA, Inc.s domestic subsidiaries and are
secured by mortgages on certain fee and leasehold properties and security interests in substantially all of Cinemark USA, Inc.s and the guarantors personal property, including, without limitation, pledges of all of Cinemark USA,
Inc.s capital stock, all of the capital stock of certain of Cinemark USA, Inc.s domestic subsidiaries and 65% of the voting stock of certain of its foreign subsidiaries.
The Amended Senior Secured Credit Facility contains usual and customary negative covenants for agreements of this type, including, but
not limited to, restrictions on Cinemark USA, Inc.s ability, and in certain instances, its subsidiaries and Cinemark Holdings, Inc.s ability, to consolidate or merge or liquidate, wind up or dissolve; substantially change the
nature of its business; sell, transfer or dispose of assets; create or incur indebtedness; create liens; pay dividends, and repurchase stock; and make capital expenditures and investments. If Cinemark USA, Inc. has borrowings outstanding on the
revolving credit line, it is required to satisfy a consolidated net senior secured leverage ratio covenant as determined in accordance with the Amended Senior Secured Credit Facility.
The dividend restriction contained in the Amended Senior Secured Credit Facility prevents the Company and any of its subsidiaries from
paying a dividend or otherwise distributing cash to its stockholders unless (1) the Company is not in default, and the distribution would not cause the Company to be in default, under the Amended Senior Secured Credit Facility; and (2) the
aggregate amount of certain dividends, distributions, investments, redemptions and capital expenditures made since December 18, 2012, including dividends declared by the board of directors, is less than the sum of (a) the aggregate amount
of cash and cash equivalents received