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Debt | 3 Months Ended
--- | ---
Jun. 30, 2018
Debt Disclosure [Abstract] |
Debt | Total debt of the Company, excluding film obligations and production loans, was as follows as of June 30, 2018 and March 31, 2018:
| June 30, 2018 |  | March 31, 2018
| (Amounts in millions)
Corporate debt: |  |  |
Revolving Credit Facility | $ | — |  |  | $ | — |
Term Loan A(1) | 750.0 |  |  | 750.0 |
Term Loan B(1) | 1,246.9 |  |  | 1,250.0 |
5.875% Senior Notes | 520.0 |  |  | 520.0 |
Total corporate debt | 2,516.9 |  |  | 2,520.0 |
Convertible senior subordinated notes(2) | — |  |  | 60.0 |
Capital lease obligations | 49.0 |  |  | 50.5 |
Total debt | 2,565.9 |  |  | 2,630.5 |
Unamortized discount and debt issuance costs, net of fair value adjustment on capital lease obligations | (70.6 | ) |  | (73.1 | )
Total debt, net | 2,495.3 |  |  | 2,557.4 |
Less current portion | (27.2 | ) |  | (79.1 | )
Non-current portion of debt | $ | 2,468.1 |  |  | $ | 2,478.3 |
_____________________
(1) | To manage interest rate risk on certain of its LIBOR-based floating-rate corporate debt, as of June 30, 2018. the Company has entered into two interest rate swaps to effectively convert the floating interest rates to fixed interest rates on a $1.2 billion notional amount (see Note 17 for further information). In addition, on July 31, 2018, the Company entered into a third interest rate swap agreement to effectively convert the floating interest rates to fixed interest rates on an additional $300.0 million notional amount of LIBOR-based debt (see Note 19).
(2) | On April 15, 2018, the 1.25% convertible senior subordinated notes due April 2018 (the "April 2013 1.25% Notes") matured, and upon maturity, the Company repaid the outstanding principal amount, together with accrued and unpaid interest.
Senior Credit Facilities (Revolving Credit Facility, Term Loan A and Term Loan B) Issuance. On March 22, 2018, the Company amended its credit and guarantee agreement issued December 8, 2016 (the "Amended Credit Agreement"), and in connection with the amendment and repayment of amounts previously outstanding under the credit and guarantee agreement, obtained a new $1.5 billion five-year revolving credit facility (the "Revolving Credit Facility"), incurred a new five-year term loan A in aggregate principal amount of $750.0 million (the "Term Loan A") and incurred a new seven-year term loan B in aggregate principal amount of $1,250.0 million (the "Term Loan B", and together with the Revolving Credit Facility and the Term Loan A, the "Senior Credit Facilities"). Revolving Credit Facility Availability of Funds & Commitment Fee. The Revolving Credit Facility provides for borrowings and letters of credit up to an aggregate of $1.5 billion, and at June 30, 2018 there was $1.5 billion available. However, borrowing levels are subject to certain financial covenants as discussed below. There were no letters of credit outstanding at June 30, 2018. The Company is required to pay a quarterly commitment fee on the Revolving Credit Facility of 0.250% to 0.375% per annum, depending on the achievement of certain leverage ratios, as defined in the Amended Credit Agreement, on the total Revolving Credit Facility of $1.5 billion less the amount drawn. Maturity Date: •Revolving Credit Facility & Term Loan A: March 22, 2023. •Term Loan B: March 24, 2025. Interest:
• | Revolving Credit Facility & Term Loan A: Initially bear interest at a rate per annum equal to LIBOR plus 1.75% (or an alternative base rate plus 0.75%) margin, with a LIBOR floor of zero. The margin is subject to potential increases of up to 50 basis points (two (2) increases of 25 basis points each) upon certain increases to net first lien leverage ratios, as defined in the Amended Credit Agreement (effective interest rate of 3.84% as of June 30, 2018).
• | Term Loan B: As of March 22, 2018, pursuant to the Amended Credit Agreement described above, the Term Loan B bears interest at a rate per annum equal to LIBOR plus 2.25% margin, with a LIBOR floor of zero (or an alternative base rate plus 1.25% margin) (effective interest rate of 4.34% as of June 30, 2018).
Required Principal Payments:
• | Term Loan A: Quarterly principal payments which began on June 30, 2018 (the last day of the first full fiscal quarter ending after March 22, 2018), at quarterly rates of 0.00% for the first year, 1.25% for the second year, 1.75% for the third year, and 2.50% for the fourth and fifth years, with the balance payable at maturity.
• | Term Loan B: Quarterly principal payments which began on June 30, 2018 (the last day of the first full fiscal quarter ending after March 22, 2018), at a quarterly rate of 0.25%, with the balance payable at maturity.
The Term Loan A and Term Loan B also require mandatory prepayments in connection with certain asset sales, subject to certain significant exceptions, and the Term Loan B is subject to additional mandatory repayment from specified percentages of excess cash flow, as defined in the Amended Credit Agreement. Optional Prepayment:
• | Revolving Credit Facility & Term Loan A: The Company may voluntarily prepay the Revolving Credit Facility and Term Loan A at any time without premium or penalty.
• | Term Loan B: The Company may voluntarily prepay the Term Loan B at any time.
Security. The Senior Credit Facilities are guaranteed by the Guarantors (as defined in the Amended Credit Agreement) and are secured by a security interest in substantially all of the assets of Lionsgate and the Guarantors (as defined in the Amended Credit Agreement), subject to certain exceptions. Covenants. The Senior Credit Facilities contain representations and warranties, events of default and affirmative and negative covenants that are customary for similar financings and which include, among other things and subject to certain significant exceptions, restrictions on the ability to declare or pay dividends, create liens, incur additional indebtedness, make investments, dispose of assets and merge or consolidate with any other person. At June 30, 2018, the capacity to pay dividends under the Senior Credit Facilities significantly exceeded the amount of the Company's retained earnings or net loss, and therefore the Company's net loss of $11.4 million and retained earnings of $506.2 million were deemed free of restrictions at June 30, 2018. In addition, a net first lien leverage maintenance covenant and an interest coverage ratio maintenance covenant apply to the Revolving Credit Facility and the Term Loan A and are tested quarterly. As of June 30, 2018, the Company was in compliance with all applicable covenants. Change in Control. The Company may also be subject to an event of default upon a change in control (as defined in the Amended Credit Agreement) which, among other things, includes a person or group acquiring ownership or control in excess of 50% of the Company’s common shares. 5.875% Senior Notes Issuance. On October 27, 2016, Lions Gate Entertainment Corp. issued $520.0 million aggregate principal amount of 5.875% senior notes due 2024 (the "2016 5.875% Senior Notes"). On March 28, 2018, in connection with a private exchange offer of the $520.0 million aggregate principal amount of its 2016 5.875% Senior Notes, an indirect, wholly owned subsidiary of the Company issued $512.3 million aggregate principal amount of new 5.875% senior notes due 2024 (the "2018 5.875% Senior Notes", and collectively with the 2016 5.875% Senior Notes, the "5.875% Senior Notes"). The new 2018 5.875% Senior Notes were exchanged by the Company for $512.3 million of the 2016 5.875% Senior Notes. Interest. Bears interest at 5.875% annually. Maturity Date. November 1, 2024. Optional Redemption:
(i) | Prior to November 1, 2019, the 5.875% Senior Notes are redeemable under certain circumstances (as defined in the indenture governing the 5.875% Senior Notes), in whole at any time or in part from time to time, at a price equal to 100% of the principal amount, plus the Applicable Premium (as defined in the indenture governing the 5.875% Senior Notes). The Applicable Premium is the greater of (i) 1.0% of the principal amount redeemed and (ii) the excess of the present value of the redemption amount at November 1, 2019 (see below) of the notes redeemed plus interest through the redemption date (discounted at the treasury rate on the redemption date plus 50 basis points) over the principal amount of the notes redeemed on the redemption date.
(ii) | On and after November 1, 2019, redeemable by the Company, in whole or in part, at the redemption prices set forth as follows (as a percentage of the principal amount redeemed), plus accrued and unpaid interest to the redemption date: (i) on or after November 1, 2019 - 104.406%; (ii) on or after November 1, 2020 - 102.938%; (iii) on or after November 1, 2021 - 101.439%; and (iv) on or after November 1, 2022 - 100%.
Security. The 5.875% Senior Notes are guaranteed on an unsubordinated, unsecured basis. Covenants. The 5.875% Senior Notes contain certain restrictions and covenants that, subject to certain exceptions, limit the Company’s ability to incur additional indebtedness, pay dividends or repurchase the Company’s common shares, make certain loans or investments, and sell or otherwise dispose of certain assets subject to certain conditions, among other limitations. At June 30, 2018, the capacity to pay dividends under the 5.875% Senior Notes significantly exceeded the amount of the Company's retained earnings or net loss, and therefore the Company's net loss of $11.4 million and retained earnings of $506.2 million were deemed free of restrictions at June 30, 2018. As of June 30, 2018, the Company was in compliance with all applicable covenants. Change in Control. The occurrence of a change of control will be a triggering event requiring the Company to offer to purchase from holders all of the 5.875% Senior Notes, at a price equal to 101% of the principal amount, plus accrued and unpaid interest, if any, to the date of purchase. In addition, certain asset dispositions will be triggering events that may require the Company to use the excess proceeds from such dispositions to make an offer to purchase the 5.875% Senior Notes at 100% of their principal amount, plus accrued and unpaid interest, if any to the date of purchase. Interest Expense The table below sets forth the composition of the Company’s interest expense for the three months ended June 30, 2018 and 2017:
| Three Months Ended
| June 30,
| 2018 |  | 2017
| (Amounts in millions)
Interest expense |  |  |
Cash interest | $ | 32.5 |  |  | $ | 34.6 |
Amortization of debt discount and financing costs | 2.9 |  |  | 4.4 |
| 35.4 |  |  | 39.0 |
Interest on dissenting shareholders' liability (see Note 16) | 15.9 |  |  | 13.3 |
Total interest expense | $ | 51.3 |  |  | $ | 52.3 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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