The AMC theater debt refinance plan is now officially on the table.
CEO Adam Aron touched topic on the subject last year after taking debt at a very high interest to survive in 2020 and part of 2021.
In a nutshell, Adam Aron’s plan is to refinance their debt and to lower their interest expense.
Moody’s also just upgraded AMC to Caa2 and gives the company a positive rating due to its continuing recovery.
But more on that later.
Welcome to Franknez.com – today’s market news is very positive news for AMC Entertainment indeed. We’re going to go over what AMC theater’s debt refinance plan means for the company and shareholders alike.
Let’s get started!
AMC Entertainment Inc. sells $950 million junk-bond
What is a junk-bond?
A junk-bond is a type of bond often times issued by companies that are struggling financially and have a higher risk of default.
It’s essentially an IOU to help companies stay afloat.
Well, AMC is restructuring its debt by selling this $950 million junk bond to pay down debt maturing in 2025.
AMC Entertainment was able to nearly double to the size of the original offering of $500 million.
Despite the decline in share price, this is a great sign that AMC is moving past the pandemic.
“The box office is returning, and the business is coming back,” said Bloomberg Intelligence analyst Stephen Flynn. “This is clearly a recovery-from-the-pandemic story.” – Bloomberg
Moody’s upgrades AMC to Caa2
AMC Entertainment Inc. has been upgraded from CFR to Caa2.
CFR meaning in danger of default to a now safer tier.
Moody’s gives AMC a positive outlook due to the industry’s continuing recovery.
AMC’s debt refinance plan has shown investors the company is taking their debt problem very seriously.
AMC Entertainment is currently $5 billion in debt.
Adam Aron has stayed true to his word in regard to paying off company debt.
It seems the company has a very clear goal to get on the right track fundamentally.
Where do you see the company 5 years from now?
Leave a comment below at the end of the article.
AMC ends 2021 with $8.1 billion in cash
AMC Entertainment released a press release on their website summarizing Q4 earnings for 2021.
Adam Aron stated, “AMC’s 2021 results improved significantly as the year progressed, and we finished the year with the strongest quarter in two years. The fourth quarter of 2021 marks a meaningful milestone with positive EBITDA of more than $145 million, positive Operating Cash Generated of more than $215 million, and a record year-ending liquidity position of $1.8 billion.”
The company is without a doubt doing incredibly well at overcoming pandemic and market adversity.
AMC is the largest movie exhibition company in the United States, the largest in Europe and the largest throughout the world with approximately 950 theatres and 10,500 screens across the globe.
Despite AMC’s great debt refinance plan, the company stock continues to be heavily shorted.
You can read all about AMC’s short squeeze data here.
I will be highlighting AMC’s Q4 earnings call so be sure to subscribe to the newsletter for updates.
Be sure to browse the market news tab for more content.
Final thoughts
Analysts bearish on AMC Entertainment stock will not discuss this positive news.
That’s why you have me!
Although investors buying AMC stock are in it for a short squeeze, the company has definitely won a lot of people’s support fundamentally.
I’ve said this since early last year, AMC is eventually going to evolve into a company you’re going to want to buy into whether it’s for a short squeeze play or for (at some point) long-term growth.
Given the various innovative changes in the company, it’s safe to say Adam Aron is steering in the right direction with the use of NFTs and cryptocurrency.
AMC is paying off their debt with this new refinance plan and the company seems to have a clear vision of where they want to go.
Are you holding AMC stock?
Leave a comment below 👊
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Thanks for this update Sir Frank. May God Bless you more🙏
Thanks for your comment Jerome, God bless you brother 🤝
I enjoyed finally seeing an article that is honestly presented. Mostly doom and gloom is all I see so this objective look at the benefit of refinancing really costly debt is appreciated. I felt this was needed last year, however; I think AA’s timing makes more sense. 4th quarter was huge, so now he’s proven they’re able to be profitable and the next step is to use that positive momentum to knock points off your debt. I’m a fan.
You are the best Frank.!!! Thank you for your Wisdom and teachings.
Much love brother 🤝
Thanks for commenting Jeff 👊🔥