An AMC theatre is pictured in Occasions Sq. within the Manhattan borough of New York Metropolis, New York, June 2, 2021.
Carlo Allegri | Reuters
AMC Entertainment struck a deal to refinance its debt, practically doubling the dimensions of the bond providing it made early Wednesday.
AMC acquired investor commitments for a brand new $950 million bond deal that it’ll use to pay down maturing debt and associated charges. The corporate had initially focused a deal dimension of $500 million with an rate of interest of 10.5%.
The brand new bond will carry an rate of interest of round 7.5% and extends the maturity by 4 years to 2029.
Issuing these senior secured notes is the subsequent step in CEO Adam Aron’s bid to enhance AMC’s monetary place.
Whereas the home field workplace has begun to get well, ticket gross sales stay muted in comparison with prepandemic ranges. Refinancing to push debt maturities out can assist AMC save money and pay down curiosity on different notes which can be due sooner.
This matches the narrative that Aron has been speaking to buyers in 2022. In the beginning of the 12 months he stated his purpose was to “refinance a few of our debt to scale back our curiosity expense, push out some debt maturities by a number of years and loosen covenants.”
After narrowly avoiding chapter final 12 months, AMC rode the meme stock wave and revitalized its business. Now it should cope with greater than $5 billion in debt that it gathered previous to the pandemic by way of theater upgrades and acquisitions.
Shares of the corporate slipped greater than 8% on Wednesday, final buying and selling round $15. AMC’s inventory is down greater than 40% to this point in 2022.