AMC Entertainment had some good news today as long talks with lenders have resulted in collaborative refinancing transactions that extend up to $2.45 million in debt maturities from 2026 to 2029 and beyond.
The company called the deals “transformative” and said they’ll strengthen the balance sheet, pave the way for future de-levering, and align the capital structure with the expected industry growth trajectory.
The transactions include: $1.2 billion of new secured term loans due 2029 issued in consideration for an open market purchase of Senior Secured Term Loans due 2026, with a potential to extend an additional $800 million of 2026 maturities to 2029. And $500 million of 10%/12% Cash/PIK Toggle Second Lien Subordinated Secured Notes due 2026 exchanged into new secured term loans due 2029 or repurchased with proceeds of $414 million new exchangeable notes due 2030.
There’s the opportunity to reduce debt by $464 million through the conversion of exchangeable notes into equity.
AMC Chairman and CEO Adam Aron said thanked lenders for their “unwavering support and commitment.”
“This agreement represents an undeniably strong vote of confidence by our lenders in AMC’s future and provides AMC with the necessary financial flexibility to capitalize on an expected strong industry recovery trajectory.”
Aron added, “This transaction represents yet another bold and innovative step that AMC is taking to ensure a successful recovery from the unprecedented box office challenges of the last few years. Not only have our lenders agreed to extend our debt maturities but we have also created the potential for significant debt reduction as the industry recovers.”
On an upbeat note, he said he believes “box office challenges of the first half of 2024 are now in the rear-view mirror. The recovery momentum is back. We expect strong year-over-year box office growth in the back half of 2024, continuing into 2025 and 2026. With today’s announcement we are ever more confident in the future of our business as we will continue to take the necessary actions to best position AMC to thrive in a more favorable environment.”
MORE
The company called the transactions “transformative” and said they’ll strengthen the balance sheet, pave the way for future de-levering, and align the capital structure with the expected industry growth trajectory. Basically, AMC has revived and the market looks better but the company’s debt is high. And given the industry’s ups and downs, it was critical to extend payments due in 2026.
The transactions include: $1.2 billion of new secured term loans due 2029 issued in consideration for an open market purchase of Senior Secured Term Loans due 2026, with a potential to extend an additional $800 million of 2026 maturities to 2029.
Another $500 million of 10%/12% Cash/PIK Toggle Second Lien Subordinated Secured Notes due 2026 will be exchanged into new secured term loans due 2029 or repurchased with proceeds of $414 million new exchangeable notes due 2030.
There’s the opportunity to reduce debt by $464 million through the conversion of exchangeable notes into equity.
AMC Chairman and CEO Adam Aron said thanked lenders for their “unwavering support and commitment.”
“This agreement represents an undeniably strong vote of confidence by our lenders in AMC’s future and provides AMC with the necessary financial flexibility to capitalize on an expected strong industry recovery trajectory.”
Aron added, “This transaction represents yet another bold and innovative step that AMC is taking to ensure a successful recovery from the unprecedented box office challenges of the last few years. Not only have our lenders agreed to extend our debt maturities but we have also created the potential for significant debt reduction as the industry recovers.”
On an upbeat note, he said he believes “box office challenges of the first half of 2024 are now in the rear-view mirror. The recovery momentum is back. We expect strong year-over-year box office growth in the back half of 2024, continuing into 2025 and 2026. With today’s announcement we are ever more confident in the future of our business as we will continue to take the necessary actions to best position AMC to thrive in a more favorable environment.”
The stock popped on the refinancing news, up 2.4% at $5.13.
MORE
The post AMC Entertainment Inks Key Refinancing Deal With Lenders, A Relief For Chain And Its Shareholders appeared first on Deadline.
