The Marcus Corporation Announces Completion of Private Offering of $100 Million Senior Notes and $86.4 Million Convertible Senior Notes Repurchases
Summary of Transactions
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The Company raised
$100 million from new and existing investors through an upsized and oversubscribed private placement offering (the “Offering”) of senior notes in two tranches issued at a price of 100.00% of the aggregate principal amount thereof:-
Tranche A -
$60 million aggregate principal amount of 6.89% senior notes due 2031 (final maturity of 7 years with amortization payments starting on the third anniversary of the closing) (the “Tranche A Notes”); and -
Tranche B -
$40 million aggregate principal amount of 7.02% senior notes due 2034 (final maturity of 10 years with amortization payments starting on the fourth anniversary of the closing) (the “Tranche B Notes” and, collectively with the Tranche A Notes, the “Offered Notes”).
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Tranche A -
The Offered Notes are guaranteed by the Company’s restricted subsidiaries that guarantee its existing senior notes and credit facility, and share in the same collateral securing those obligations.
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The net proceeds of the Offering will be used to refinance the previously disclosed
$86.4 million aggregate principal amount of privately negotiated cash repurchases effected over two separate repurchase tranches (the “Repurchases”) of the Company’s 5.00% Convertible Senior Notes due 2025 (the “Convertible Senior Notes”) and for general corporate purposes. The first repurchase transaction retired$40 million of principal of Convertible Senior Notes and closed onJune 14, 2024 , and the second repurchase transaction will retire$46.4 million of principal of Convertible Senior Notes upon closing expected to occur on or aboutJuly 16, 2024 . In connection with the Repurchases, the Company entered into unwind agreements with certain financial institutions to terminate a portion of the existing capped call transactions in a notional amount equal to the aggregate principal amount of the Repurchases. Upon closing, the final cash cost of the Repurchases, net of the cash received from the unwind of the capped call transactions, will be$87.9 million .
Following the completion of the Repurchases,
“We were thrilled by the strong show of support that we received from new and existing investors who participated in our oversubscribed and competitively priced notes offering,” said
The Offered Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and, unless so registered, may not be offered or sold in
Forward-Looking Statements
Certain matters discussed in this press release are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally be identified as such because the context of such statements include words such as we “believe,” “anticipate,” “expect” or words of similar import. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which may cause results to differ materially from those expected, including, but not limited to the factors discussed in our 2023 Annual Report on Form 10-K under “Risk Factors,” which is on file at the
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