AMC Entertainment (AMC) Provides Update on Refinancing, Transfers 175 Theaters to Muvico

On July 22, 2024 AMC Entertainment (NYSE: AMC) completed a series of refinancing transactions (the “Transactions”) with two creditor groups to refinance and extend to 2029 and 2030 the maturities of approximately $1.6 billion of the Company’s debt maturing in 2026. These arrangements provide for the potential additional refinancing of up to approximately $800 million of debt maturing in 2026 or earlier.

In connection with the refinancing:

· The Company and Muvico, LLC, a newly formed indirect wholly-owned subsidiary of the Company (“Muvico”), entered into that certain Credit Agreement (the “New Term Loan Credit Agreement”), by and among the Company and Muvico, each, as a borrower (collectively, the “New Term Loan Borrowers”), the lenders party thereto and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent (in such capacities, the “New Term Loan Agent”), pursuant to which the Company and Muvico jointly and severally borrowed $1.2 billion of new term loans maturing 2029 (“New Term Loans”).

· The New Term Loans were (i) used as consideration for the open market purchase of $1.1 billion of the Company’s existing senior secured term loans maturing in 2026 (“Existing Term Loans”) and (ii) exchanged for $104.2 million of the Company’s 10%/12% Cash/PIK Toggle Second Lien Subordinated Secured Notes due 2026 (“Second Lien Notes”). Under the terms of the New Term Loan Credit Agreement, lenders of remaining Existing Term Loans will be entitled to exchange their remaining Existing Term Loans for New Term Loans subject to certain terms and conditions.

· Muvico also completed a private offering for cash of $414.4 million aggregate principal amount of 6.00%/8.00% Cash/PIK Toggle Senior Secured Exchangeable Notes due 2030 (the “Exchangeable Notes”), which are guaranteed by the Company, the existing guarantors under the Existing Term Loans and the Existing First Lien Notes (as defined herein) (the “Existing Guarantors”) and Centertainment (as defined below) and which are exchangeable into the Company’s Class A common stock (“Common Stock”) on the terms described herein.

· Muvico used the proceeds of the offering of Exchangeable Notes to repurchase $414.4 million aggregate principal amount of Second Lien Notes. Muvico is entitled to issue up to an additional $50.0 million of Exchangeable Notes (“Additional Exchangeable Notes”), the proceeds of which must be used to repurchase other outstanding debt due in 2025, 2026 and 2027.

In connection with the formation of Muvico, among other things:

· The Company and certain of its subsidiaries (collectively, “AMC”) transferred certain leases, owned real property and related assets and rights in respect of 175 theatres (the “Transferred Theatres”) to Muvico, along with certain intellectual property, including the AMC brand name, (the “Transferred IP”), pursuant to an asset transfer agreement (the “Asset Transfer Agreement”).

· Muvico and AMC entered into a management services agreement (the “Management Services Agreement”), pursuant to which Muvico engaged AMC to manage and operate the Transferred Theatres and provide certain other management services to Muvico.

· Muvico and AMC entered into an intellectual property license agreement (the “Intercompany License Agreement”), pursuant to which Muvico granted AMC a license to use the Transferred IP.

Muvico is a direct subsidiary of Centertainment Development, LLC (“Centertainment”). Each of Muvico and Centertainment is an “unrestricted subsidiary” under the Existing Term Loans and the Existing First Lien Notes and therefore not subject to various restrictive covenants under the covenants governing such indebtedness.

On the Closing Date, the Company entered into that certain Fourteenth Amendment to Credit Agreement (the “Existing Credit Agreement Amendment”), by and among the Company, the Existing Guarantors, the lenders party thereto (which constituted the “Required Lenders” as defined in the Existing Credit Agreement referred to below, the “Specified Existing Lenders”) and Wilmington Savings Fund Society, FSB, as administrative agent and as collateral agent, which amends the credit agreement governing the Existing Term Loans (as amended through the Thirteenth Amendment to Credit Agreement, dated as of June 23, 2023, the “Existing Credit Agreement”). Pursuant to the Existing Credit Agreement Amendment, certain provisions of the Existing Credit Agreement, including certain affirmative covenants, negative covenants and events of default were removed with the consent of the Specified Existing Lenders. In addition, the Specified Existing Lenders consented to all of the transactions described herein and consented to, and directed Wilmington Savings Fund Society, FSB, as collateral agent in respect of the Existing Term Loans (in such capacity, the “Existing Credit Agreement Collateral Agent”), to enter into the Credit Facilities Intercreditor Agreement (as defined below).

The foregoing summary of the Existing Credit Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the Existing Credit Agreement Amendment attached as Exhibit 4.1 hereto, and is incorporated herein by reference.

New Term Loan Credit Agreement

Amortization, Interest, Guarantees and Security

The New Term Loan Credit Agreement provides for (i) the New Term Loans in an initial aggregate principal amount of $1,229,415,340 and (ii) the ability of the New Term Loan Borrowers to incur additional New Term Loans, the proceeds of which will be used in connection with future open market purchases of the Existing Term Loans.

The New Term Loans mature on January 4, 2029 (or, if at least $190,000,000 of Existing First Lien Notes have not been repurchased (and cancelled), repaid or refinanced by October 5, 2028, then October 5, 2028). The New Term Loans are subject to amortization of principal, payable in quarterly installments on the last business day of each fiscal quarter, commencing on September 30, 2024, equal to 1.00% per annum. The remaining aggregate principal amount outstanding (together with accrued and unpaid interest on the principal amount) of the New Term Loans is payable at maturity.

The New Term Loans bear interest, at the option of the New Term Loan Borrowers, at rates equal to either (i) a base rate plus a margin of between 500 and 600 basis points depending on the total leverage ratio of the Company and its subsidiaries on a consolidated basis (the “Total Leverage Ratio”) and (ii) Term SOFR plus a margin of between 600 and 700 basis points depending on the Total Leverage Ratio. Until the delivery under the New Term Loan Credit Agreement of the financial statements for the first full fiscal quarter ending after the Closing Date, the New Term Loans bear interest, at the option of the Company, at either (i) the base rate plus a margin of 600 basis points or (ii) Term SOFR plus a margin of 700 basis points.

The New Term Loans are guaranteed, subject to limited exceptions, by Centertainment and Muvico and their future respective subsidiaries (collectively, the “Centertainment Group Parties”) and the Existing Guarantors, and are secured by liens on substantially all of the tangible and intangible assets owned by the Company and such guarantors, in each case, subject to limited exceptions set forth in the New Term Loan Credit Agreement.

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