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AMC Bonds Tumble Amid Restructuring Fears
24 Jan
Summary
- Bondholders initiate confidential talks with AMC.
- AMC's 15% bonds dropped significantly on Friday.
- Company previously underwent a major debt restructuring.
Confidential discussions have commenced between a group of AMC Entertainment Holdings Inc. bondholders and the theater chain. This development has led to a significant decline in the value of some of its notes, raising concerns about further debt maneuvers.
Specifically, holders of the 15% bonds maturing in February 2029 saw their notes drop more than 5 cents on the dollar on Friday. This sell-off highlights investor apprehension regarding AMC's strategic steps to manage its substantial debt.
AMC had previously executed a comprehensive restructuring agreement in 2024. This deal enabled the company to defer certain debt repayments and transferred theaters and intellectual property, placing them beyond the reach of some creditors. A subsequent settlement resolved litigation initiated by a group of lenders and facilitated new capital infusion.
The company has been actively reducing its debt obligations through various debt swaps and buyback programs. These efforts are ongoing as AMC navigates uneven ticket sales experienced since the pandemic lockdowns. In the third quarter, AMC reported decreases in attendance, revenue, and earnings, attributing the decline to 'industrywide softness.' Despite these challenges, the company anticipates a strong fourth-quarter box office performance.
