AMC focuses on debt due 2025, 2029 as it cuts balance sheet leverage

By Devika Patel

Knoxville, Tenn., Dec. 4 – AMC Networks, Inc. recently announced the redemption of $400 million of notes due 2024 and also has outstanding notes due in 2025 and 2029, which it plans to address in the near future as the company is focused on deleveraging the balance sheet.

“Right now, we’re producing, kind of run rate, $200 million of free cash flow,” executive vice president and chief financial officer Patrick O’Connell said at the Bank of America Securities Leveraged Finance Conference in Boca Raton, Fla., on Nov. 28.

“We’ll end the year with about $600 million, or approaching $600 million of cash on the balance sheet.

“You'll be aware that we’ve essentially redeemed the 2024s, that will close here in the coming weeks, and so you set up $600 million of cash on the balance sheet, $200 million of run rate free cash flow.

“We think that will continue into 2024 and, so, you should assume that we will be kind of focused on the 2025s, as everyone would expect, we’ll be sort of prudent but also opportunistic in addressing those and, from a broad capital allocation perspective, folks should assume that all, if not virtually all, of the free cash flow is going to go against the balance sheet.

“We need to sort of de-lever from a gross debt standpoint and, so, that’s our focus,” he said.

The company has sufficient dry powder to address the debt maturities.

“We did do an amendment earlier this year to our credit facility that gave us $1.2 billion of secured capacity,” O’Connell said.

“It was kind of previously defined on a ratio basis, so we just locked in the $1.2 billion, so we’ve got a lot of dry powder, so to speak, on the shelf if we need to use it,” he said.

AMC is a New York-based entertainment company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.