An AMC theatre is pictured in Occasions Sq. within the New york borough of New York Town, New York, June 2, 2021.
Carlo Allegri | Reuters
AMC Leisure struck a deal to refinance its debt, just about doubling the scale of the bond providing it made early Wednesday.
AMC won investor commitments for a brand new $950 million bond deal that it’ll use to pay down maturing debt and similar charges. The corporate had to begin with focused a deal measurement of $500 million with an rate of interest of 10.5%.
The brand new bond will elevate an rate of interest of round 7.5% and extends the adulthood via 4 years to 2029.
Issuing those senior secured notes is the next move in CEO Adam Aron’s bid to reinforce AMC’s monetary place.
Whilst the home field place of job has begun to get better, price ticket gross sales stay muted in comparison to prepandemic ranges. Refinancing to push debt maturities out can assist AMC save money and pay down hobby on different notes which are due quicker.
This suits the narrative that Aron has been speaking to traders in 2022. Originally of the yr he stated his function used to be to “refinance a few of our debt to scale back our hobby expense, push out some debt maturities via a number of years and unfasten covenants.”
After narrowly fending off chapter final yr, AMC rode the meme inventory wave and revitalized its trade. Now it should handle greater than $5 billion in debt that it amassed previous to the pandemic thru theater upgrades and acquisitions.
Stocks of the corporate slipped greater than 8% on Wednesday, final buying and selling round $15. AMC’s inventory is down greater than 40% up to now in 2022.
