United states securities and exchange commission



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Maturity Date. The Senior Notes are due November 1, 2016.

Original Issue Discount/Premium. The October 2009 Senior Notes were issued by LGEI at an initial price of 95.222% (original issue discount — 4.778%) of the principal amount. The May 2011 Senior Notes were issued by LGEI at an initial price of 102.219% (original issue premium — 2.219%) of the principal amount, plus accrued interest thereon from May 1, 2011, resulting in gross proceeds of approximately $204.4 million and net proceeds of approximately $192.4 million after fees and expenses, including $5.6 million paid in connection with the consent solicitation of holders of the October 2009 Senior Notes. The original issue discount/premium, interest and deferred financing costs are being amortized through November 1,
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2016 using the effective interest method. As of March 31, 2012 , the remaining amortization period was 4.6 years.

Interest. The Senior Notes pay interest semi-annually on May 1 and November 1 of each year at a rate of 10.25% per year.

Security. The Senior Notes are guaranteed on a senior secured basis by us, and certain wholly-owned subsidiaries of both us and LGEI. The Senior Notes are ranked junior in right of payment to our senior revolving credit facility, ranked equally in right of payment to our subordinated notes, and ranked senior to any of our unsecured debt.

Covenants. The Senior Notes contain certain restrictions and covenants that, subject to certain exceptions, limit our ability to incur additional indebtedness, pay dividends or repurchase our common shares, make certain loans or investments, and sell or otherwise dispose of certain assets subject to certain conditions, among other limitations.

Under the terms of the Senior Notes, there are certain covenants which restrict our ability to incur certain additional indebtedness, make certain “restricted payments” as defined, and other items. These covenants require certain ratios, such as the Secured Leverage Ratio and Consolidated Leverage Ratio (as defined in the indentures), to meet certain specified thresholds before such additional indebtedness, restricted payments or other items are permitted under the terms of the indenture. These ratios are partially based on the net borrowing base amount, as calculated pursuant to the indenture. The following table sets forth the total gross and net borrowing base and certain components of the borrowing base as prescribed by the indenture to the Senior Notes:



 















































Borrowing

Base

Definition

Clause (2)

 

Category Name

 

March 31, 2012

 

 

 

 

Gross (1)

 

 

Rate

 

Net (1)

 

 

 

 

(Amounts in millions)

(i)

 

Eligible Major Domestic Receivables

 

$

170.8






 

100%

 

$

170.8




(ii)

 

Eligible Acceptable Domestic Receivables

 

172.8






 

90%

 

155.5




(iii)

 

Eligible Acceptable Foreign Receivables

 

28.8






 

85%

 

24.5




(iv)

 

Acceptable Tax Credits

 

42.6






 

85%/75%

 

33.7




(v)

 

Other Domestic Receivables

 

43.4






 

50%

 

21.7




(vi)

 

Other Foreign Receivables

 

18.2






 

50%

 

9.1




 

 

Borrowing Base from Receivables

 

$

476.6




  

 

 

 

$

415.3




(vii)

 

Eligible Film Library

 

596.6






 

50%

 

298.3




(viii)

 

Eligible Video Cassette Inventory

 

30.5




 

 

lesser of 50% or $10 million

 

10.0




(ix)

 

Total Home Video, Pay Television, Free Television Credits

 

158.3




 

 

Misc.

 

158.3




(xiii)

 

Cash Collateral Accounts

 

2.4






 

100%

 

2.4




(xiv)

 

P&A Credit

 

10.4






 

50%

 

5.2




 

 

Borrowing Base at March 31, 2012

 

$

1,274.8




  

 

 

 

$

889.5




 







(1)

Gross amount represents the amount as of each applicable category and the net amount represents the acceptable portion of that amount permitted to be counted in the Borrowing Base (as defined) under the indenture.







(2)

The following numbered clauses from the Borrowing Base definition were either not applicable or not material as of March 31, 2012 : (x) Direct to Video Credit; (xi) Foreign Rights Credit; (xii) Eligible L/C Receivables.


Term Loan

In connection with the acquisition of Summit (see Note 15 to our consolidated financial statements), the Company entered into a new $500.0 million principal amount term loan agreement (the "Term Loan") and received net proceeds of $476.2 million , after original issue discount and offering fees and expenses. The net proceeds were used in connection with the acquisition of Summit to pay off Summit's existing term loan.


Outstanding Amount. The outstanding amount of the Term Loan is set forth in the table below:
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March 31,
2012


 

(Amounts in thousands)

Principal amount

$

484,664




Unamortized discount

(7,150

)

Net carrying amount

$

477,514






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