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Long Term Debt | 6 Months Ended
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Jun. 30, 2023
Debt Disclosure [Abstract] |
Long Term Debt Activity | 7. Long Term Debt Long-term debt of Holdings consisted of the following for the periods presented:
| June 30, |  |  | December 31, |
| 2023 |  |  | 2022 |
Cinemark Holdings, Inc. 4.50% convertible senior notes due 2025 | $ | 460.0 |  |  | $ | 460.0 |
Cinemark USA, Inc. term loan due 2030 |  | 648.4 |  |  |  | 626.5 |
Cinemark USA, Inc. 8.75% senior secured notes due 2025 |  | 150.0 |  |  |  | 250.0 |
Cinemark USA, Inc. 5.875% senior notes due 2026 |  | 405.0 |  |  |  | 405.0 |
Cinemark USA, Inc. 5.25% senior notes due 2028 |  | 765.0 |  |  |  | 765.0 |
Other |  | 8.0 |  |  |  | 10.1 |
Total long-term debt carrying value (1) | $ | 2,436.4 |  |  | $ | 2,516.6 |
Less: Current portion |  | 8.1 |  |  |  | 10.7 |
Less: Debt issuance costs and original issue discount, net of accumulated amortization (1) |  | 38.0 |  |  |  | 31.9 |
Long-term debt, less current portion, net of unamortized debt issuance costs and original issue discount (1) | $ | 2,390.3 |  |  | $ | 2,474.0 |
(1) The only differences between the long-term debt for Holdings, as presented above, and the long-term debt for CUSA are the $460.0 4.50% Convertible Senior Notes due 2025 and the related debt issuance costs. The following table sets forth, as of the periods indicated, the total long-term debt carrying value, current portion of long-term debt and debt issuance costs, net of amortization, for CUSA.
| June 30, |  |  | December 31, |
| 2023 |  |  | 2022 |
Total long-term debt carrying value | $ | 1,976.4 |  |  | $ | 2,056.6 |
Less: Current portion |  | 8.1 |  |  |  | 10.7 |
Less: Debt issuance costs and original issue discount, net of accumulated amortization |  | 30.7 |  |  |  | 22.9 |
Long-term debt, less current portion, net of unamortized debt issuance costs and original issue discount | $ | 1,937.6 |  |  | $ | 2,023.0 |
Senior Secured Credit Facility On May 26, 2023, CUSA amended and restated its senior secured credit facility (the “Credit Agreement”) to provide for an aggregate principal amount of $775.0, consisting of a $650.0 term loan with a maturity date of May 24, 2030 and a $125.0 revolving credit facility with a maturity date of May 26, 2028. The term loan is subject to a springing maturity date of April 15, 2028 if CUSA’s 5.25% Senior Notes due 2028 have not been paid or refinanced as required under the Credit Agreement prior to such date. The revolving credit facility is subject to springing maturity dates of January 30, 2025, December 14, 2025 and April 15, 2028 if CUSA’s 8.75% Senior Secured Notes due 2025, 5.875% Senior Notes due 2026 and 5.25% Senior Notes due 2028 have not been paid or refinanced as required under the Credit Agreement prior to such dates, as more specifically described in the Credit Agreement. CUSA used the $632.7 net proceeds of the borrowings under the Credit Agreement to fund the $628.3 repayment of the term loan outstanding under the Credit Agreement prior to the amendment and restatement and accrued interest thereon, and for other general corporate purposes. Under the Credit Agreement, principal payments of $1.6 are due on the term loan quarterly through March 31, 2030, with a final principal payment of all remaining unpaid principal due on May 24, 2030. The term loan was issued net of an original issue discount of $9.8. CUSA also incurred a total of approximately $10.1 in debt issuance costs in connection with the amendment, which are reflected in the condensed consolidated financial statements as follows: (i) $7.5 in debt issuance costs were capitalized and are reflected as a reduction of “Long-term debt, less current portion” on the Company’s condensed consolidated balance sheet; and (ii) $2.1 of fees paid to lenders and $0.5 of legal and other fees are included in “Loss on debt extinguishment and refinancing” in the Company’s condensed consolidated statement of income for the three and six months ended June 30, 2023. As a result of the amendment, CUSA also wrote-off $4.7 of unamortized debt issuance costs associated with exiting lenders of the refinanced Credit Agreement. Interest on the term loan accrues, at CUSA's option, at either (i) a rate determined by reference to the secured overnight financing rate ("SOFR") as published by CME Group Benchmark Administration Limited and identified by Barclay's Bank PLC (the Administrative Agent) as the forward-looking term rate based on SOFR for a period of 1, 3, or 6 months (depending upon the Interest Period (as defined in the Credit Agreement) chosen by CUSA) (the "Term SOFR Rate"), subject to a floor of 0.50% per annum, plus an applicable margin of 3.75% per annum, or (ii) for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Reserve Bank of New York Rate in effect on such day, plus 1/2 of 1.00% and (c) the Term SOFR Rate for a one month Interest Period, as published two U.S. Government Securities Business Days prior to such day (or if such day is not a U.S. Government Securities Business Day, the immediately preceding U.S. Government Securities Business Day), plus 1.00% (this clause (ii), the "Alternate Base Rate"), subject in the case of this clause (ii) to a floor of 1.50% per annum, plus, in the case of this clause (ii), an applicable margin of 2.75%. The average interest rate on outstanding term loan borrowings under the Credit Agreement as of June 30, 2023 was approximately 6.8% per annum, after giving effect to the interest rate swap agreements discussed below. Interest on revolving credit loans accrues, at CUSA's option, at either (i) the Term SOFR Rate plus an applicable margin that ranges from 3.00% to 3.50% per annum, or (ii) the Alternate Base Rate, subject, in the case of this clause (ii) to a floor of 1.00% per annum, plus, in the case of this clause (ii), an applicable margin that ranges from 2.00% to 2.50%. The applicable margin with respect to revolving credit loans is a function of the Consolidated Net Senior Secured Leverage Ratio as defined in the Credit Agreement. As of June 30, 2023, the applicable margin was 3.50%, however, there were no borrowings outstanding under the revolving line of credit. In addition, CUSA is required to pay a commitment fee on the revolving line of credit that accrues at a rate ranging from 0.20% to 0.375% per annum of the daily unused portion of the revolving line of credit. The commitment fee rate is a function of the Consolidated Net Senior Secured Leverage Ratio. CUSA’s obligations under the Credit Agreement are guaranteed by Holdings and certain subsidiaries of Holdings other than CUSA (the “Other Guarantors”) and are secured by security interests in substantially all of CUSA’s, Holdings’ and the Other Guarantors’ personal property. The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on the ability of Holdings, CUSA and their subsidiaries to: merge, consolidate, liquidate, or dissolve; sell, transfer or otherwise dispose of assets; create, incur or permit to exist certain indebtedness and liens; pay dividends, repurchase stock and make other Restricted Payments (as defined in the Credit Agreement); prepay certain indebtedness; make investments; enter into transactions with affiliates; and change the nature of their business. At any time that CUSA has revolving credit loans outstanding, it is not permitted to allow the Consolidated Net Senior Secured Leverage Ratio to exceed 3.5 to 1.0. As of June 30, 2023, there were no revolving credit loans outstanding under the revolving line of credit, and CUSA’s Consolidated Net Senior Secured Leverage Ratio was 0.6 to 1.0. The Credit Agreement also includes customary events of default, including, among other things, payment default, covenant default, breach of representation or warranty, bankruptcy, cross-default, material ERISA events, a change of control, material money judgments and failure to maintain security interests. If an event of default occurs, all commitments under the Credit Agreement may be terminated and all obligations under the Credit Agreement could be accelerated by the Lenders, causing all loans outstanding (including accrued interest and fees payable thereunder) to be declared immediately due and payable. The Restricted Payments covenant, as defined in the Credit Agreement generally does not limit the ability of Holdings and its subsidiaries to pay dividends and make other Restricted Payments if the Consolidated Net Total Leverage Ratio (as defined in the Credit Agreement) is less than or equal to 2.75 to 1.00. If the Consolidated Net Total Leverage Ratio is greater than 2.75 to 1.00, but no greater than 5.00 to 1.00, Restricted Payments generally may be made in an aggregate amount not to exceed the Available Amount (as defined in the Credit Agreement), which is a function of CUSA’s Consolidated EBITDA minus 1.75 times its Consolidated Interest Expense (as such terms are defined in the Credit Agreement) and certain other factors as specified in the Credit Agreement. As of June 30, 2023, the Consolidated Net Total Leverage Ratio was 2.80 to 1.00. As of June 30, 2023, the Available Amount was $262.5. In addition, the Credit Agreement contains other baskets that allow certain Restricted Payments in excess of the Applicable Amount. 8.75% Secured Notes On May 1, 2023, CUSA redeemed $100.0 in principal amount of the 8.75% Secured Notes plus accrued interest thereon for $106.6 in cash. Following the redemption, $150.0 in aggregate principal amount of the 8.75% Secured Notes remains outstanding. As a result of the redemption, CUSA recognized a loss on extinguishment of debt totaling $3.4, which includes a $2.2 premium paid on the redemption of bonds and a $1.2 write-off of unamortized debt issuance costs, and is reflected in “Loss on debt extinguishment and refinancing” in the Company’s condensed consolidated statement of income for the three and six months ended June 30, 2023. For additional discussion of the 8.75% Secured Notes, see Note 14 to the Company’s consolidated financial statements for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed February 24, 2023. Interest Rate Swap Agreements The Company’s interest rate swap agreements are used to hedge a portion of the interest rate risk associated with the variable interest rates on the Company’s term loan debt and qualify for cash flow hedge accounting. Effective May 31, 2023, in conjunction with the amendment of its Credit Agreement, the Company amended its three then existing interest rate swap agreements to update the reference rate from LIBOR to Term SOFR, and the Company applied the optional relief provided in FASB ASC Topic 848 prospectively to account for this modification. Topic 848 provides optional expedients that allow an entity not to dedesignate an existing hedging relationship when critical terms of the agreement are modified, but rather allow an existing hedging relationship to continue when one or more of the critical terms in the existing hedging agreement change because of reference rate reform. Therefore, we did not dedesignate the hedging relationship due to the amendment of our existing interest rate swap agreements on May 31, 2023, and accumulated losses due to the fair value adjustments on the interest rate swaps remained in other comprehensive income. Below is a summary of the Company's interest rate swap agreements, which are designated as cash flow hedges, as of June 30, 2023:
Notional |  |  |  |  |  |  |  |  |  |  | Estimated |
Amount |  |  | Effective Date |  | Pay Rate |  | Receive Rate |  | Expiration Date |  | Fair Value (1) |
$ | 137.5 |  |  | December 31, 2018 |  | 2.08% |  | 1-Month Term SOFR |  | December 31, 2024 |  | $ | 5.9 |
$ | 175.0 |  |  | December 31, 2018 |  | 2.09% |  | 1-Month Term SOFR |  | December 31, 2024 |  |  | 7.5 |
$ | 137.5 |  |  | December 31, 2018 |  | 2.15% |  | 1-Month Term SOFR |  | December 31, 2024 |  |  | 5.8 |
|  |  |  |  |  |  |  |  | Total |  | $ | 19.2 |
(1) Approximately $14.3 of the total is included in prepaid expenses and other and $4.9 is included in deferred charges and other assets, net on the condensed consolidated balance sheet as of June 30, 2023. The fair values of the interest rate swaps are recorded on Holdings' and CUSA's condensed consolidated balance sheets as an asset or liability with the related gains or losses reported as a component of accumulated other comprehensive loss. The changes in fair value are reclassified from accumulated other comprehensive loss into earnings in the same period that the hedged items affect earnings. The valuation technique used to determine fair value is the income approach and, under this approach, the Company used projected future interest rates as provided by counterparties to the interest rate swap agreements and the fixed rates that the Company is obligated to pay under the agreement. Therefore, the Company's measurements use significant unobservable inputs, which fall in Level 2 of the U.S. GAAP hierarchy as defined by FASB ASC Topic 820-10-35. Fair Value of Long-Term Debt The Company estimates the fair value of its long-term debt primarily using quoted market prices, which fall under Level 2 of the U.S. GAAP fair value hierarchy as defined by ASC 820, Fair Value Measurement (“ASC Topic 820”). The table below presents the fair value of the Company's long-term debt as of the periods presented:
|  | As of |
|  | June 30, 2023 |  |  | December 31, 2022 |
Holdings fair value (1) |  | $ | 2,496.8 |  |  | $ | 2,210.5 |
CUSA fair value |  | $ | 1,868.2 |  |  | $ | 1,771.3 |
(1) The fair value of the 4.50% convertible senior notes was $628.6 and $439.2 as of June 30, 2023 and December 31, 2022, respectively.

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI https://asc.fasb.org/topic&trid=2208564 + Details
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