AMC's stock slid this year, but its most-liquid bond is a different story

MW AMC's stock slid this year, but its most-liquid bond is a different story

By James Rogers

AMC shares are down more than 25% this year. But bond investors are applauding AMC's debt restructuring efforts.

AMC Entertainment Holdings Inc.'s shares are down 25.6% this year as the movie-theater chain continues its push beyond the disruption of the pandemic and the fallout from last year's Hollywood strikes. For comparison, the S&P 500 index is up 25.1% in 2024.

However, AMC's $(AMC)$ most-liquid bond paints a different picture, as the following chart from data-solutions provider BondCliQ Media Services shows. The price of the AMC Entertainment's 7.5% notes due Feb. 15, 2029 has climbed from $66.70 in early January to $88.59 this month.

The performance of the AMC notes reflects what could be a pivotal year for the company. AMC reported better-than-expected third-quarter results earlier this month, with CEO Adam Aron pointing to a "greatly improving industry-wide box office."

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Aron highlighted AMC's bullishness about "the impressive movie slate" coming to its theaters in November and December of 2024, a trend that he says will continue in 2025 and 2026.

AMC, like rival Cinemark Holdings Inc. $(CNK)$, stands to benefit from eagerly anticipated movies "Wicked" and "Gladiator II," which hit theaters Friday, as well forthcoming releases "Moana 2," which opens Nov. 27, and "Mufasa: The Lion King," and "Sonic the Hedgehog 3," which hit theaters Dec. 20.

In July, AMC announced a debt restructuring to strengthen its balance sheet and prepare for the expected recovery in the movie-theater industry. The refinancing transactions extend the maturity of approximately $1.6 billion of the company's debt that was due in 2026 to 2029 and 2030, providing "significant incremental financial runway," AMC said in a statement released on July 22.

Related: AMC reports better-than-expected third-quarter results amid improving box office

Set against this backdrop, the AMC Entertainment's 7.5% notes due Feb. 15, 2029 have rallied significantly from a summer price low of $65.19 on July 23.

In a filing in September AMC also revealed that it has shaved almost $153 million off of its debt load.

Like fellow meme stock GameStop Corp. $(GME)$, AMC saw its stock price surge earlier this year - lifted by the return of commentator Keith Gill, also known as Roaring Kitty, to social media. But the stocks pared back those gains.

-James Rogers

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November 22, 2024 14:07 ET (19:07 GMT)

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