Quarterly report pursuant to Section 13 or 15(d)

Long Term Debt

v3.22.2.2
Long Term Debt
9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Long Term Debt Activity
7.
Long Term Debt

Long-term debt of Holdings consisted of the following for the periods presented:

 

September 30,

 

 

December 31,

 

 

2022

 

 

2021

 

Cinemark Holdings, Inc. 4.500% convertible senior notes due 2025

$

460.0

 

 

$

460.0

 

Cinemark USA, Inc. term loan due 2025

 

628.2

 

 

 

633.1

 

Cinemark USA, Inc. 8.750% senior secured notes due 2025

 

250.0

 

 

 

250.0

 

Cinemark USA, Inc. 5.875% senior notes due 2026

 

405.0

 

 

 

405.0

 

Cinemark USA, Inc. 5.250% senior notes due 2028

 

765.0

 

 

 

765.0

 

Other

 

21.9

 

 

 

30.2

 

Total carrying value of long-term debt

$

2,530.1

 

 

$

2,543.3

 

Less: Current portion

 

22.0

 

 

 

24.3

 

Less: Debt issuance costs, net of accumulated amortization

 

34.6

 

 

 

42.7

 

Long-term debt, less current portion, net of unamortized debt issuance costs

$

2,473.5

 

 

$

2,476.3

 

Long-term debt of CUSA consisted of the following for the periods presented:

 

September 30,

 

 

December 31,

 

 

2022

 

 

2021

 

Cinemark USA, Inc. term loan due 2025

$

628.2

 

 

$

633.1

 

Cinemark USA, Inc. 8.750% senior secured notes due 2025

 

250.0

 

 

 

250.0

 

Cinemark USA, Inc. 5.875% senior notes due 2026

 

405.0

 

 

 

405.0

 

Cinemark USA, Inc. 5.250% senior notes due 2028

 

765.0

 

 

 

765.0

 

Other

 

21.9

 

 

 

30.2

 

Total carrying value of long-term debt

$

2,070.1

 

 

$

2,083.3

 

Less: Current portion

 

22.0

 

 

 

24.3

 

Less: Debt issuance costs, net of accumulated amortization

 

24.7

 

 

 

30.3

 

Long-term debt, less current portion, net of unamortized debt issuance costs

$

2,023.4

 

 

$

2,028.7

 

Senior Secured Credit Facility

CUSA has a senior secured credit facility that includes a $700.0 term loan and a $100.0 revolving credit line (the “Credit Agreement”) which is guaranteed by Holdings. As of September 30, 2022, there was $628.2 outstanding under the term loan and no borrowings were outstanding under the revolving credit line. As of September 30, 2022, $100.0 was available for borrowing under the revolving credit line. Quarterly principal payments of $1.6 are due on the term loan through December 31, 2024, with a final principal payment of $613.4 due on March 29, 2025. The revolving credit line matures on November 28, 2024. The average interest rate on outstanding term loan borrowings under the Credit Agreement as of September 30, 2022 was approximately 4.1% per annum, after giving effect to the interest rate swap agreements discussed below.

Interest Rate Swap Agreements

Below is a summary of the Company's interest rate swap agreements, which are designated as cash flow hedges, as of September 30, 2022:

Notional

 

 

 

 

 

 

 

 

 

 

Estimated

 

Amount

 

 

Effective Date

 

Pay Rate

 

Receive Rate

 

Expiration Date

 

Fair Value (1)

 

$

137.5

 

 

December 31, 2018

 

2.12%

 

1-Month LIBOR

 

December 31, 2024

 

$

6.1

 

$

175.0

 

 

December 31, 2018

 

2.12%

 

1-Month LIBOR

 

December 31, 2024

 

 

8.0

 

$

137.5

 

 

December 31, 2018

 

2.19%

 

1-Month LIBOR

 

December 31, 2024

 

 

6.1

 

 

 

 

 

 

 

 

 

 

Total

 

$

20.2

 

 

(1)
Approximately $9.9 of the total is included in prepaid expenses and other and $10.3 is included in deferred charges and other assets, net on the condensed consolidated balance sheet as of September 30, 2022.

Effective March 31, 2020, the Company amended and extended its three then existing interest rate swap agreements, all of which are used to hedge a portion of the interest rate risk associated with the variable interest rates on its term loan debt and qualify for cash flow hedge accounting. Upon amending the interest rate swap agreements effective March 31, 2020, the Company determined that the interest payments hedged with the agreements are still probable to occur, therefore the loss that accumulated on the swaps prior to the amendments is being amortized to interest expense through December 31, 2022, the original maturity dates of the swaps. Approximately $1.1 was recorded in interest expense in the condensed consolidated statements of loss for the three months ended September 30, 2022 and 2021 and $3.4 was recorded in interest expense in the condensed consolidated statements of loss for the nine months ended September 30, 2022 and 2021.

The fair values of the interest rate swaps are recorded on Holdings' and CUSA's condensed consolidated balance sheets as an asset or liability with the related gains or losses reported as a component of accumulated other comprehensive loss. The changes in fair value are reclassified from accumulated other comprehensive loss into earnings in the same period that the hedged items affect earnings. The valuation technique used to determine fair value is the income approach and, under this approach, the Company used projected future interest rates as provided by counterparties to the interest rate swap agreements and the fixed rates that the Company is obligated to pay under the agreement. Therefore, the Company's measurements use significant unobservable inputs, which fall in Level 2 of the U.S. GAAP hierarchy as defined by FASB ASC Topic 820-10-35.

Fair Value of Long-Term Debt

The Company estimates the fair value of its long-term debt primarily using quoted market prices, which fall under Level 2 of the U.S. GAAP fair value hierarchy as defined by ASC 820, Fair Value Measurement (“ASC Topic 820”). The table below presents the fair value of the Company's long-term debt as of the periods presented:

 

 

As of

 

 

 

September 30, 2022

 

 

December 31, 2021

 

Holdings fair value (1)

 

$

2,326.2

 

 

$

2,749.8

 

CUSA fair value

 

$

1,798.7

 

 

$

2,058.0

 

(1)
Includes the fair value of the 4.500% convertible senior notes of $527.5 and $691.9 as of September 30, 2022 and December 31, 2021, respectively.