| Item 1.01 | Entry into a Material Definitive Agreement. |
On February 8, 2021, AMC Networks Inc. (“AMC Networks”) entered into Amendment No. 1 (“Amendment No. 1”) to the Second Amended and Restated Credit Agreement, dated as of July 28, 2017 (as amended by Amendment No. 1, the “Credit Agreement”), in each case, among AMC Networks and its subsidiary, AMC Network Entertainment LLC (“AMC Network Entertainment”), as the initial borrowers (the “Borrowers”), certain of AMC Networks’ subsidiaries, as restricted subsidiaries, Bank of America, N.A., as an L/C Issuer, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and an L/C Issuer.
Amendment No. 1 extends the maturity dates of the Borrowers’ $675 million Term Loan A Facility and $500 million Revolving Credit Facility under the Credit Agreement to February 8, 2026, and makes certain other amendments to the covenants and other provisions of the Credit Agreement.
All obligations under the Credit Agreement are guaranteed by certain of the Borrowers’ existing and future domestic restricted subsidiaries in accordance with the Credit Agreement. All obligations under the Credit Agreement, including the guarantees of those obligations, are secured by certain assets of the Borrowers and certain of their subsidiaries.
The Credit Agreement contains certain affirmative and negative covenants applicable to AMC Networks, AMC Network Entertainment and AMC Networks’ restricted subsidiaries. These include restrictions on AMC Networks’ and its restricted subsidiaries’ ability to incur indebtedness, make investments in entities that are not “Restricted Subsidiaries” (as defined in the Credit Agreement), place liens on assets, dispose of assets, enter into certain affiliate transactions and make certain restricted payments, including restrictions on AMC Networks’ ability to pay dividends on its common stock. The Credit Agreement also requires the Borrowers to comply with certain financial covenants.
Amendment No. 1 has been filed as Exhibit 10.1 to this Current Report on Form 8-K and the description of Amendment No. 1 contained herein is qualified in its entirety by reference to Amendment No. 1, which is incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 above is hereby incorporated by reference into this Item 2.03.
On February 8, 2021, AMC Networks issued, and certain of AMC Networks’ subsidiaries (hereinafter, the “Guarantors”) guaranteed, the 4.25% Senior Notes due 2029 (the “Notes”) in a registered public offering pursuant to an Underwriting Agreement, dated January 25, 2021 (the “Underwriting Agreement”), among AMC Networks, the Guarantors, and J.P. Morgan Securities LLC, as representative of the underwriters named in Schedule I thereto. AMC Networks expects to use the net proceeds to redeem the remaining $400 million principal amount of AMC Networks’ 4.75% Senior Notes due 2022 at a redemption price of 100.000% and $600 million principal amount of AMC Networks’ 5.00% Senior Notes due 2024 at a redemption price of 102.500%, plus, in each case, accrued interest to, but excluding, the date of redemption, and to pay related expenses. The Notes were registered by AMC Networks under the Securities Act of 1933, as amended, pursuant to a registration statement on Form S-3 (File No. 333-234695). A copy of the Underwriting Agreement is attached as Exhibit 1.1 to this Current Report on Form 8-K.
The Notes were issued pursuant to the Indenture, dated as of March 30, 2016 (the “Base Indenture”), as supplemented by the Third Supplemental Indenture, dated as of February 8, 2021, among AMC Networks, the Guarantors and U.S. Bank National Association, as Trustee (the “Third Supplemental Indenture”).
The Notes will accrue interest at a rate of 4.25% per annum and mature on February 15, 2029. Interest will be payable semiannually on February 15 and August 15 of each year, commencing on August 15, 2021. The Notes are AMC Networks’ general senior unsecured obligations and will rank equally with all of AMC Networks’ and the Guarantors’ existing and future unsecured and unsubordinated indebtedness, but will be effectively subordinated to all of AMC Networks’ and the Guarantors’ existing and future secured indebtedness, including all borrowings and guarantees under the Credit Agreement, to the extent of the assets securing that indebtedness.
