AMC Theatres plan to sell $500 million in bonds in order to pay down debt and other fees that will mature by 2025, the theater chain announced on Wednesday.
The senior secured notes, which hold an interest rate of 10.5%, will be used to pay related fees, costs, premiums and expenses.
CEO Adam Aron had previously indicated an intention to refinance some debt in 2022, so the move is not unexpected.
AMC was near bankruptcy prior to the pandemic but took on debt at high interest rates throughout the pandemic in order to stay afloat. The theater chain in Q4 had its highest quarter in two years but still lost over $100 million, despite revenue soaring in Q4 2021 compared to the same time in 2020 when many theaters remained shuttered ahead of the vaccines.
AMC also had some help throughout the pandemic thanks to its position as a “meme stock” from retail traders, which enabled the company to sell shares at an inflated price.
The box office recovery in 2021 saw some success with massive hits like “Spider-Man: No Way Home,” but it has been difficult to lure theater-goers out consistently, especially older crowds for films like “West Side Story” and “Nightmare Alley.”
