IMAX entered into a new five-year, $300 million senior secured revolving credit facility, replacing the company’s prior credit facility. Wells Fargo acted as agent and Wells Fargo Securities acted as sole lead arranger on the transaction.
The new facility contains an accordion feature allowing the company to further expand its borrowing capacity to $440 million or greater. Borrowings under the new facility will bear interest at the reduced spread of 1.00% to 1.75% above LIBOR, depending on the company’s leverage ratio. The facility also contains customary terms for a transaction of this type, including a single financial maintenance covenant that requires the company to maintain a senior secured net leverage ratio of no more than 3.25x.
IMAX intends to use the proceeds of the facility to repay outstanding term loan debt in connection with its Playa Vista headquarters, to finance ongoing working capital requirements and for other general corporate purposes.
“This new facility, coupled with the recurring cash generated by our network, will provide us with enhanced flexibility as we continue the global expansion of our business and pursue other avenues to increase shareholder value,” said Patrick McClymont, IMAX’s chief financial officer.
Wells Fargo Securities and Citibank served as joint bookrunners on the facility. Citibank served as syndication agent, while Export Development Canada, HSBC Bank and National Bank of Canada served as co-documentation agents.