An AMC theater is pictured in Times Square in the Manhattan borough of New York, New York, June 2, 2021.

Carlos Allegri | Reuters

Theater chain AMC Entertainment plans to sell $500 million in bonds in an effort to pay off maturing debt and related costs, the company announced Tuesday.

The issuance of these senior secured notes, which carry an interest rate of 10.5%, is the next step in CEO Adam Aron’s attempt to improve AMC’s financial situation.

While the domestic box office has begun to recover, ticket sales remain low from pre-pandemic levels. Refinancing to extend debt maturities can help AMC save money and pay off interest on other notes that mature earlier.

This aligns with the narrative Aron communicated to investors in 2022. At the start of the year, he said his goal was to “refinance some of our debt to reduce our interest charges, push some maturities out by several years and relax covenants”. “

After narrowly avoiding bankruptcy last year, AMC rode the stock wave and revitalized its business. It now has to deal with more than $5 billion in debt it racked up before the pandemic through theater upgrades and acquisitions.

Shares of the company slid 5% on the news, last trading around $16. AMC’s stock is down more than 40% since January.