Blockbuster Closes Offering of $675 Million of Senior Secured Notes Due 2014

Blockbuster Closes Offering of $675 Million of Senior Secured Notes Due 2014

Chairman and CEO Comments on Successful Refinancing and Company Strategy

DALLAS // PRNewswire-FirstCall // -- Blockbuster Inc. (NYSE: BBI) (NYSE: BBI.B), a leading global provider of media entertainment, today announced it has closed its previously announced offering of $675 million aggregate principal amount of 11.75 percent Senior Secured Notes due 2014 at an issue price of 94.0 percent.

J.P. Morgan Securities Inc. acted as the sole book-running manager of the Notes offering. The Company will use the net proceeds of the Notes offering to repay all indebtedness outstanding under the Company's revolving credit facility and Term Loan B, its revolving asset-based loan facility in Canada, fund fees and expenses of the transaction and for general corporate purposes. The letters of credit outstanding under the revolving credit facility will remain outstanding.

Commenting on the completion of its successful refinancing and business strategy, Blockbuster Chairman and Chief Executive Officer, Jim Keyes, stated: "The completion of the $675 million Notes offering is another important milestone for Blockbuster. We are pleased with this expression of investor confidence in the sustainability of our business model. This will enable us to increase our points of presence and expand the depth and breadth of product selection and convenience across all of our channels. Blockbuster is well positioned to continue our transformation into a multi-platform provider of media entertainment."

Blockbuster's new financing will provide flexibility as the Company provides convenient access to media entertainment to its more than 50 million annual customers through four key points of distribution - in store, by-mail, vending and digital download.

Blockbuster operates stores within a 10-minute drive of approximately 70 percent of United States households and stands to significantly increase its overall points of distribution through its DVD vending initiative with NCR Corporation; its by-mail and Total Access™ programs with over 95,000 movie titles available; and its BLOCKBUSTER On Demand® service, which is set to enter into millions of homes across the country through alliances with leading consumer electronics and device manufacturers. The BLOCKBUSTER On Demand service will also be available in select Motorola phones, providing Motorola with access to the Company's library of premium digital entertainment to mobile devices for the first time.

Additionally, in step with the transformation of its business, Blockbuster will maintain focus on operational efficiencies which have reduced general and administrative expenses by $166 million during the first half of 2009 and remains on-track to reduce its general and administrative expenses by $200 million in 2009, excluding foreign exchange and inflation. The Company continues to evaluate cost saving opportunities and liquidity enhancing initiatives and pursue the divestiture of certain non-strategic assets outside of North America.

"This new bond offering, combined with our cost savings initiatives and additional cash availability through the sale of our Irish assets and the reduction of the Viacom letters of credit, provides us with adequate liquidity and the flexibility to continue our business transformation," Keyes said." We would like to thank our lenders and agent bank, JPMorgan Chase Bank, for their tremendous support over the past few years."

In line with the new financing, Standard & Poor's Rating Service recently upgraded Blockbuster's credit rating, commenting that the upgrade reflects their estimation that the Company's refinancing will enhance its liquidity and improve operating flexibility. Additionally, Moody's Investor's Service placed Blockbuster's credit rating on review for an upgrade, noting that the successful closing of the Company's refinancing would strengthen its capital structure and address key constraints to its liquidity.

The Notes were offered to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and to persons outside the United States in accordance with regulations under the Securities Act. The Notes were not registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Forward Looking Statements

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "predicts," "targets," "seeks," "could," "intends," "foresees" or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements in this release that describe our strategies, cost savings initiatives, future actions, plans or goals are forward-looking. These forward-looking statements are based on management's current intent, belief and expectations. These statements are not guarantees of future outcomes and involve risks, uncertainties, assumptions and other factors that are difficult to predict. Therefore, actual outcomes may vary materially from what is expressed in or indicated by the forward-looking statements. The risk factors set forth under "Item 1A. Risk Factors" in our Annual Reports on Form 10-K and other matters discussed from time to time in our filings with the Securities and Exchange Commission, including the "Disclosure Regarding Forward-Looking Information" and "Risk Factors" sections of our Quarterly Reports on Form 10-Q, among others, could affect future outcomes, causing outcomes results to differ materially from those expressed in our forward-looking statements. Accordingly, our investors are cautioned not to place undue reliance on these forward-looking statements because, while we believe the assumptions on which the forward-looking statements are based are reasonable, there can be no assurance that these forward-looking statements will prove to be accurate. We undertake no obligation to update publicly any forward-looking statement in this release or in other documents, our website or oral statements for any reason, even if new information becomes available or other events occur in the future.

About Blockbuster Inc.

Blockbuster Inc. is a leading global provider of rental and retail movie and game entertainment. The Company provides its customers with convenient access to media entertainment anywhere and anyway they want it - whether in-store, by-mail, through vending and kiosks or digital download. With a highly recognized brand name and a library of over 125,000 movie and game titles, Blockbuster leverages its multi-channel presence to best serve the 2 million daily global customers and over 50 million annual global customers who purchase its media content and to further build upon its leadership position in the media entertainment industry. The Company has approximately 7,100 stores in the United States, its territories and 19 other countries. Annual revenues were $5.3 billion as of January 4, 2009.

SOURCE Blockbuster Inc.



comments powered by Disqus

Franchise News Room »

News By Industry »

Featured Opportunities

Eat. Energize. That's the Freshii mantra. Since 2005, Freshii has been on a mission to help the citizens of the world live better by making healthy...
Estrella Insurance
Estrella Insurance® specializes auto insurance & car insurance quotes.
Poke Burri
Poke Burri is a Georgia-based restaurant company that provides a healthy and delicious dining experience focused around the popular dish, known as...
uBreakiFix is a consumer electronics repair company based out of Orlando, FL that specializes in refurbishing and restoring smartphones, tablets,...
Elements Massage
When simplicity is the essence of your business model, clients and owners benefit. Clients want a predictably wonderful experience with every visit....
Share This Page

Subscribe to Franchising Express

A Franchise Update Media Production
Franchise Update Media
P.O. Box 20547
San Jose, CA 95160
PH. (408) 402-5681
In Loving Memory Of Timothy Gardner (1987-2014)

Copyright © 2001 - 2018.
All Rights Reserved.