Cinedigm Shares Rise After It Secures $195M To Refinance Debt

The stock is up 13.1% this afternoon after the digital cinema company unveiled the deals. It has a $125M senior non-recourse credit facility from a group led by Societe Generale Corporate & Investment Banking, and a $70M non-recourse credit facility from Prospect Capital Corporation. Added to the company’s own cash flow, Cinedigm says that it will refinance its existing $92M non-recourse senior 2010 Term Loan and $98M recourse Note. The refinancing takes advantage of today’s low interest rates. CEO Chris McGurk adds that it also “reaffirms the value of the Company’s digital cinema asset base and positions Cinedigm to accelerate our growth plans.” B. Riley analyst Eric Wold says that the changes should cut $5M from annual interest expenses, and — by removing the recourse debt — eliminates what had been “a major overhang on the stock for years.” He also notes that Moody’s Investor Service just reclassified Cinedigm debt as investment grade, up from speculative. That could help the company to become “a major player in the distribution of indie films and alternative content,” Wold says. Blackstone Advisory Partners advised Cinedigm in the transactions. 

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