Starz, LLC (NASDAQ:STRZA) Files An 8-K Termination of a Material Definitive Agreement
Item 1.02. Termination of a Material Definitive Agreement
On the Closing Date, the Company paid in full all amounts owing
under that certain Credit Agreement, dated as of April 20, 2015,
among the Company, as the borrower, the lenders party thereto and
The Bank of Nova Scotia, as administrative agent, and terminated
all commitments to extend further credit thereunder.
On the Closing Date, the Company also satisfied and discharged
its obligations under the Indenture, dated as of September 13,
2012, among the Company and Starz Finance Corp., as issuers, the
guarantors party thereto, and U.S. Bank National Association, as
trustee (the Starz Trustee), by irrevocably
depositing with the Starz Trustee funds sufficient to redeem in
full the $675 million of 5.00% Senior Notes due 2019, and issued
a notice of redemption in respect of such notes, with a
redemption date of January 7, 2017.
Item 2.03. Creation of a Direct Financial Obligation or
an Obligation under an Off-Balance Sheet Arrangement of a
Registrant
Lions Gate Senior Notes
On October 27, 2016, LG FinanceCo Corp.
(FinanceCo), a wholly owned subsidiary of Lions
Gate, completed an offering of $520,000,000 aggregate principal
amount of 5.875% senior notes due in 2024 (the
Notes), the proceeds of which were used in
connection with the Merger. The Notes were issued to an
indenture, dated as of October 27, 2016, between FinanceCo and
Deutsche Bank Trust Company Americas, as trustee (the
Base Indenture). In connection with the Merger,
on the Closing Date, Lions Gate and certain of its subsidiaries
including, Starz, the Company and certain of Starzs other
subsidiaries (collectively, the Guarantors), and
Deutsche Bank Trust Company Americas, as trustee, entered into a
supplemental indenture to the Base Indenture (the
Supplemental Indenture and together with the
Base Indenture, the Indenture), to which the
Guarantors jointly and severally, fully and unconditionally,
guaranteed the Notes on an unsubordinated, unsecured basis.
The description of the Indenture contained herein is not intended
to be complete and is qualified in its entirety by reference to
the full text of the Base Indenture, which was filed with the
Securities and Exchange Commission (the SEC) by
Lions Gate as Exhibit 4.1 to its Current Report on Form 8-K, on
October 27, 2016, and of the Supplemental Indenture, which is
filed herewith as Exhibit 4.1, each of which is incorporated
herein by reference.
Lions Gate Senior Credit Facilities
In connection with the consummation of the Merger, Lions Gate
entered into a Credit and Guarantee Agreement (the Credit
Agreement), dated as of the Closing Date, among Lions
Gate, as borrower, the Guarantors, the lenders referred to
therein, and JPMorgan Chase Bank, N.A., as administrative agent.
The Credit Agreement provides for a $1.0 billion revolving credit
facility (the Revolver), a $1.0 billion term
loan A facility (Term Loan A) and a
$2.0 billion term loan B facility (Term Loan B
and together with the Revolver and Term Loan A, the
Senior Credit Facilities). The Revolver and Term
Loan A mature on the date that is five years after the Closing
Date, and Term Loan B matures on the date that is seven years
after the Closing Date.
The Senior Credit Facilities are guaranteed by the Guarantors and
are secured by a security interest in substantially all of the
assets of Lions Gate and the Guarantors, subject to certain
exceptions.
The Revolver and Term Loan A will bear interest initially at a
rate per annum equal to LIBOR plus 2.50% (or an alternative base
rate plus 1.50%), subject to reductions in the margin of up to 50
basis points (two reductions of 25 basis points each) upon
achievement of certain net first lien leverage ratios. Term Loan
B will bear interest at a rate per annum equal to LIBOR (subject
to a LIBOR floor of 0.75%) plus 3.00% (or an alternative base
rate plus 2.00%). Lions Gate will also pay certain undrawn
commitment fees in connection with the Revolver.
Term Loan A amortizes quarterly beginning the last day of the
first full fiscal quarter ending after the Closing Date at
quarterly rates of 1.25% for the first and second years after the
Closing Date, 1.75% for the third year, and 2.50% for the fourth
and fifth years, with the balance payable at maturity. Term Loan
B amortizes quarterly beginning on the last day of the first full
fiscal quarter ending after the Closing Date at an annual rate of
1%, with the balance payable at maturity. Term Loan A and Term
Loan B also require mandatory prepayments in connection with
certain asset sales, subject to certain significant exceptions,
and Term Loan B is subject to additional mandatory repayment from
specified percentages of excess cash flow. Additionally, Term
Loan B requires Lions Gate to pay a 1.00% prepayment fee if the
loans thereunder are subject to certain repricing transactions
within the first six months following the Closing Date.
The Senior Credit Facilities contain representations and
warranties, events of default and affirmative and negative
covenants that are customary for similar financings and which
include, among other things and subject to certain significant
exceptions, restrictions on the ability to declare or pay
dividends, create liens, incur additional indebtedness, make
investments, dispose of assets and merge or consolidate with any
other person. In addition, a net first lien leverage maintenance
covenant and an interest coverage ratio maintenance covenant
apply to the Revolver and Term Loan A and are tested quarterly.
The description of the Credit Agreement contained herein is not
intended to be complete and is qualified in its entirety by
reference to the full text of the Credit Agreement, which is
filed herewith as Exhibit 10.1, and which is incorporated herein
by reference.
Item 5.01. Change in Control of Registrant
The information set forth in the Introduction is incorporated
herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| ExhibitNo. | Description | |
| 4.1 |
Supplemental Indenture, dated as of December 8, 2016, among Lions Gate Entertainment Corp., Starz, the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 to Lions Gate Entertainment Corp.s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 8, 2016) |
|
| 10.1 |
Credit and Guarantee Agreement, dated as of December 8, 2016, among Lions Gate Entertainment Corp., as borrower, the guarantors party thereto, the lenders referred to therein, and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to Lions Gate Entertainment Corp.s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 8, 2016) |
About Starz, LLC (NASDAQ:STRZA)
Starz Acquisition LLC, formerly Starz, is an integrated media and entertainment company. The Company provides premium subscription video programming in the United States to cable operators, satellite television providers, telecommunications companies and online video providers. The Company’s segments include Starz Networks and Starz Distribution. The Starz Networks segment provides premium subscription video programming to the United States multichannel video programming distributors (MVPDs), including cable operators (such as Comcast and Time Warner Cable), satellite television providers (such as DIRECTV and DISH Network) and telecommunications companies (such as AT&T and Verizon). The Starz Distribution segment includes the operations of its Anchor Bay Entertainment, Starz Digital and Starz Worldwide Distribution businesses. It also develops, produces and acquires entertainment content and distributes this content to consumers in the United States and throughout the world. Starz, LLC (NASDAQ:STRZA) Recent Trading Information
Starz, LLC (NASDAQ:STRZA) closed its last trading session at 35.52 with 6,088,659 shares trading hands.