Cinemark Down On $400M Notes Offering; Street Cautiously Optimistic

Cinemark Holdings ( CNK ) has announced a private offering of $400 million convertible senior notes due 2025 to qualified institutional buyers.

According to CNK, the notes will be senior unsecured obligations of the company and will accrue interest payable semiannually in arrears.

Cinemark will use the net proceeds to pay the cost of the convertible note hedge transactions as well as for general corporate purposes, including repaying outstanding amounts under the revolving credit line of the senior secured credit facility for Cinemark USA, Inc.

Speaking for the bulls, Wedbush analyst Michael Pachter reiterated his CNK buy rating on August 4 with a $15 price target.

“We have significant concerns about the exhibition industry and the timing of its return to normalcy” the analyst commented, adding that he believes the release slate is overly optimistic, and re-shuttering of theaters presents a real risk to the industry.

However “with that said, we continue to view Cinemark as a well-managed company with the most stable results in the industry, and therefore the best exhibitor to own” he told investors.

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