AMC Theaters’ credit ratings drop from a B to a CCC- while the widespread movie theater chain closures occurred. This brings the popular theater chain from “Highly speculative” to “Default imminent, with little prospect for recovery. ” In other words, there’s a pretty good chance AMC won’t be opening back up when all of this is over, which is terrible news for employees and moviegoers who were hoping for things to get back to normal soon.
“We do not believe AMC has sufficient sources of liquidity to cover its expected negative cash flows past mid-summer, and we believe the company will likely breach its 6x net senior secured leverage covenant when tested on Sept. 30, 2020, absent a waiver from its lenders.”
While the President is giving an estimate of April 30th for businesses to open again, there are other analysts who believe this could last well into the summer. Analysts state, “We expect AMC Entertainment Holdings Inc.’s AMC theaters will remain closed beyond June,” due to the impact of global current events. So many memories for all of us, it’s a shame this really could be the end of AMC.