Marcus enters into $175 million revolver, $50 million term loan

By Jennifer Chiou

New York, Feb. 6 - Marcus Corp. entered into on Jan. 22 a five-year credit agreement providing for an up to $175 million revolving credit facility and a $50 million term loan, according to an 8-K filing with the Securities and Exchange Commission.

JPMorgan Chase Bank, NA is the administrative agent, and U.S. Bank NA acted as syndication agent.

This credit agreement replaces the company's existing $175 million credit facility.

Marcus has to repay the term loan as follows:

• Four quarterly principal installments of $625,000 beginning on May 30, 2013;

• Four quarterly principal installments of $937,500 commencing on May 29, 2014;

• Four quarterly principal installments of $1. 25 million starting on May 28, 2015;

• Four quarterly principal installments of $1,562,000 commencing on May 26, 2016;

• Three quarterly principal installments of $1,875,000 beginning on May 25, 2017; and

• A balloon payment of $26,877,000 due at maturity on Jan. 22, 2018.

Availability under the revolving credit facility is reduced by outstanding commercial paper borrowings and outstanding letters of credit, of which $100,000 of the latter is outstanding as of Feb. 6.

Marcus may request an increase to the revolver by up to $75 million.

The filing stated that the company has $49 million under the revolver in addition to the $50 million term loan to refinance the outstanding balance under its prior credit agreement.

Under the current agreement, there is a facility fee of 15 basis points to 25 bps, payable quarterly, depending on the consolidated debt to total capitalization ratio. Borrowings bear interest at Libor plus 85 bps to 137.5 bps, also based on the same ratio.

Covenants under the loan limit the company's permissible consolidated debt to total capitalization ratio to a maximum of 0.55 to 1.0. Marcus is also required to maintain a minimum fixed-charge coverage ratio of 3.0 to 1.0.

Proceeds will be used for general corporate purposes.

The Milwaukee, Wis., company owns movie theaters and hotels.

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