Cinemark has announced a debt sale. The nation's third largest exhibitor is selling off $250 million in debt securities, which are senior secured notes. Movie theaters across North America have been closed since the middle of March and have had to furlough employees in the process. Cinemark CEO Mark Zoradi and the company's board of directors recently announced that they will forgo their salaries while everything remains shut down. The theater chain had a debt load of $3.4 billion at the end of last year.

The $250 million in senior secured notes will be guaranteed by company subsidiaries and are due in 2025, which Cinemark revealed in a statement earlier today. "The Notes and the guarantees will be the company's and the guarantors' senior obligations secured by a first-priority lien on certain of the company's leasehold interests in real property," reads the statement. The goal is to use the money for "general corporate purposes" until they are able to open their doors again.

AMC Theatres is reportedly in talks with bankruptcy lawyers to walk them through the Chapter 11 filing process. The theater chain has a debt load of $4.9 billion and recently had their credit rating downgraded, which means they are in danger of not being able to reopen when the dust settles. If they can file for bankruptcy, AMC might have a shot at keeping their doors open, which would be huge. However, even when businesses are able to open up again, the movie theaters will more than likely have to keep their attendance levels down to keep practicing social distancing.

A lot of movie theaters in North America are housed in malls. For AMC, that's nearly half of their screens. When businesses are allowed to open, it is believed that the malls will be one of the last places to do so. Cinemark has 554 theaters in 42 states, along with 15 countries in South and Central America and is banking on being able to open soon. The goal at the moment is to open when it's safe and then try and get employees back to work, while also trying to get business in the door at the same time.

AMC had previously hoped to have theaters up and running again by the middle of June. At the moment, it is unclear if that will be able to happen. Regardless, most of the summer's big box office movies have shifted their release dates for later in the year, which means Cinemark, AMC, and others are going to have to do some experimenting to get the crowds back. Everything is uncertain for the time being, but Cinemark is hoping that the debt sale will ease some of the financial burden. Hopefully they will be able to secure the funds they need. Deadline was the first to report on Cinemark's $250 million debt sale.

Kevin Burwick at Movieweb
Kevin Burwick