The fresh cash follows Fitch Ratings downgrading the exhibition giant's credit rating over concerns that theater closures amid the coronavirus crisis will last until June.
Cinema theater chain Cinemark Holdings has gone to the debt market for fresh cash amid the novel coronavirus pandemic.
The exhibition giant on Monday said it has launched a private offering for $250 million in senior secured notes due 2025. The move follows Fitch Ratings on April 9 downgrading the credit rating for Cinemark over concerns that current theater closures amid the COVID-19 crisis will last until June "at the earliest."
Cinemark said it intends to use the proceeds of the debt offering "for general corporate purposes, including further increasing its liquidity." The senior notes, which are exempt from U.S. securities registration as they are aimed at international buyers, will be secured by a first-priority lien on certain leasehold property interests.
Cinemark, the third-largest domestic cinema chain, on March 16 announced temporary theater closures at all of its 345 sites amid the COVID-19 crisis. That was followed by rival cinemas across the U.S. also going dark as a health safety precaution.
Fitch last week pointed to Cinemark having $488.3 million in cash on its balance sheet as of the end of 2019, and the company having drawn $98.8 million of availability under its revolving credit line March 25 of this year.
"Fitch believes this provides adequate runway to fund the company's operations through the end of fiscal 2020," the ratings agency said, although it added that it would monitor the company's liquidity position should the public health crisis extend into the summer months.
That vote of confidence in Cinemark contrasts with Wall Street analysts seeing a possible Chapter 11 bankruptcy filing from rival cinema giant AMC Theatres as the coronavirus pandemic takes its toll on the exhibition sector.
