AMC Retires $35M In High-Interest Debt: What You Need To Know

AMC Entertainment Holdings, Inc. AMC shares are advancing Friday.

What Happened: AMC announced late Thursday it has exercised an option to repurchase $35 million of its 15% cash or 17% payment-in-kind "toggle first-lien secured notes" due 2026.

The theater chain said it spent $41.3 million on exercising the repurchase option and paying off principal and accrued unpaid interest. The annual interest cost of AMC now stands reduced by $5.25 million.

Why It's Important: The repurchase of the highest cost debt, according to the company, is a step toward optimally positioning AMC for the future.

"In addition to reducing our interest-bearing debt, we are also using our enhanced liquidity and improving business fundamentals to make meaningful reductions in deferred rent obligations. At the same time, we continue to take steps to improve our operating results and we are capitalizing on opportunities to grow and enhance our business," said Adam Aron, AMC's CEO.

AMC Price Action: At last check, AMC shares were 0.97% higher at $38.40. 

Related Link: S&P Upgrades AMC Entertainment Credit Rating: What Investors Need To Know