S&P prunes AMC Entertainment

S&P said it lowered its ratings for AMC Entertainment Holdings Inc. to SD, Selective Default, from CCC+ and its second-lien notes due 2026 to D, default, from CCC-.

AMC completed a series of exchanges of $123 million in principal of its second-lien notes due 2026 for common equity. In the fourth quarter, it bought $50 million of its second-lien notes due 2026 for an average discount of about 20%.

“The downgrade follows AMC's completion of transactions that we view as distressed and tantamount to a default. AMC completed a series of debt-for-equity exchanges through the fourth quarter of 2023. In total, the company exchanged $123 million of its 10%/12% cash/payment in kind (PIK) second-lien notes due 2026 for approximately 16.7 million shares of its class A common stock,” S&P said in a press release.

The agency said it plans to review AMC’s ratings over the next week “We will most likely raise our issuer credit rating back into the CCC category, reflecting the longer-term issues surrounding the sustainability of its capital structure and the risk of further distressed exchanges.”

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