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I’m the opposite - I’m very happy with volatility (means opportunities) but personally I don’t think the cycle is going to repeat (like it has before anyway).

“Are they predicting any profit at all this yr”

No - see docket 722 and the cash flow projections they give.

No profit expected until at least H2 2023.

"Fully Underwritten Deal
In the context of a bank loan financing, one or more initial lenders commits to fund 100% of the loans whether or not they are able to syndicate part of the loans to other lenders"

Exactly - this does not imply they 'bought the pie' in the first place, they are just committed to buying what is left of it if not enough other people buy slices.

Tbh this whole debate is boring and pointless. If you want to believe HSBC are main lenders then fine. If you want to believe it makes any difference if they are, then fine.

There are many more interesting and significant things at play here than this minor distraction.

No Jeff, if they underwrote the issue of the loans they would only retain ‘ownership’ of any that they were actually left having to take on themselves if the sell was not completely successful - nor is there actually any indication they ‘owned’ any of the loans in the first place.

Whatever way you look at it though they are not the main lenders. That description belongs to the DIP lenders which we know they are not part of.

You don't seriously believe that those buy and sell volumes are reliable do you?

*Retail - sorry didn't mean to get your name wrong.

Retrail - as Wolf has highlighted the headline for Ian's article says it clearly:

'Banks to sell US$4.3 billion-equivalent loan for Cineworld’s Regal buy'

Those banks being HSBC and Barclays. As the article details HSBC and Barclays were selling loans to other banks and institutions. They may have retained some themselves but they were 'leading' the finance in terms of being responsible for trying to get all the loans subscribed to.

They may well be an 'invested party' and therefore have a say but there are many hundreds of these in this transaction which is what makes it so complex - but the ones with the most say are the DIP lenders which, we know, neither HSBC nor Barclays belong to.

Please read these articles properly and objectively. Morgan Stanley were financial advisors and according to the link you posted they were financial advisors to Regal NOT CINE.

The article by Ian goes into details about the price of the loans being offered to the market through HSBC and Barclays so it does say they were acting as brokers.

"It stands to reason that HSBC have been a major financer for CINE for Regal"

Eh? HSBC may have been prepared to put up money for the CP deal (which obviously wasn't needed in the end) but why does this imply they actually did for Regal? The article posted by Ian clearly says they were acting as one of the brokers for the Regal loans but whether they put up any money themselves is not clear at all.

I'm bemused somewhat by this obsession with HSBC. The key players are the DIP lenders and we know for definite that HSBC are not one of them. They may be one of the many junior lenders but so what?

They MAY have taken on SOME loans themselves but the article just confirms they organised it, with the loans being offered up to other banks and interested parties on the terms indicated in the article.

No

...no worries - my numbers are also debt rather than net debt (i.e. I didn't take cash off). I think the $8bn figure was just someone's guesstimate at the time that was a bit light.

Jeff - pre-covid debt levels were lower and so were interest rates. They were making $200-$300m profit p.a. with less than $200m interest payments included in that.

Elvis - I don’t know where you are getting your $4bn figure from. The accounts have shown around $5bn for a while and the DIP now adds a further $0.7bn to that.

Jeff, I think 6% pa is a minimum given that rates are higher now and I expect the DIP financing to have increased it a bit too.

Yes Wolf, my number is just the bank loan and overdraft interest I.e. consistent with the $5bn pre-DIP debt figure.

Interest paid in the interims was $114m but probably better (due to timings) to use the interest expense which was $150m. So for half a year on about $5bn debt (pre-DIP) this gives perhaps 6% p.a. Most of the interest though is linked to various LIBOR rates (LIBOR + fixed margin) so the effective rate will be a bit higher now and I don't know what rate of interest the DIP financing is on.

Elvis - the $4bn debt we spoke about the other day was only that listed under the ad hoc group (on slide 27 of the presentation). Below that there were other loans of around $1bn or so. So total a bit over $5bn and then on top we now have the DIP financing which added another £0.7bn.

So that’s where the approximate $6bn I mentioned earlier comes from - and similar to Wolf’s breakdown.

"selling this business for 5bn and leaving equity holders with zero"

debt is now $6bn, not $5bn

HNS - Agree it's all speculation but that's why I responding to a poster saying effectively it WILL be sold AND for over $7bn. He cannot possibly know that and equally even though I think it is very unlikely, for the reasons I gave, I do not know either.

Opinions are great but stating opinion as fact is less so.

Yes, it would be very appealing if they could get all their debt repaid immediately via a sale transaction but my point is I don’t think anybody would be willing to buy it for enough to make that possible. What is more likely is that any sale would be a partial one (e.g. Regal) or be for much less but with existing lenders retaining or foregoing some debt - but these weren’t Ian’s suggestions.

Btw the lenders would never get any profit on top of their debt repayments from the sale price - any money left over would go to shareholders. The only way lenders can share in future profits as well is via some kind of D4E which I believe is still the most likely option (together with a partial sale perhaps).

A full sale but at much less than the price that enables all the debt to be repaid immediately is also quite a likely option I feel.

Basically we don’t know except that I think anything Ian says is not likely at all based on his illogical reasoning and previous track record.